Phosphatidylinositol (PI) 3-kinase is a cytoplasmic signaling molecule that is recruited to activated growth factor receptors after growth factor stimulation of cells. Activation of PI 3-kinase results in increased intracellular levels of 3′ phosphorylated inositol phospholipids and the induction of signaling responses, including the activation of the protein kinase Akt, which is also known as RAC-PK or PKB. We tested the possibility that the phospholipid products of PI 3-kinase directly mediate the activation of Akt. We have previously described a constitutively active PI 3-kinase, p110, which can stimulate Akt activity. We used purified p110* protein to generate a series of 3′ phosphorylated inositol phospholipids and tested whether any of these lipids could activate Akt in vitro. Phospholipid vesicles containing PI3, 4 bisphosphate (P 2) specifically activated Akt in vitro. By contrast, the presence of phospholipid vesicles containing PI3P or PI3, 4, 5P 3 failed to increase the kinase activity of Akt. Akt could also be activated by synthetic dipalmitoylated PI3, 4P 2 or after enzymatic conversion of PI3, 4, 5P 3 into PI3, 4P 2 with the signaling inositol polyphosphate 5′ phosphatase SIP. We show that PI3, 4P 2-mediated activation is dependent on a functional pleckstrin homology domain in Akt, since a point mutation in the pleckstrin homology domain abrogated the response to PI3, 4P 2. Our findings show that a phospholipid product of PI 3-kinase can directly stimulate an enzyme known to be an important mediator of PI 3-kinase signaling.