PTEN is mutated at high frequency in many primary human cancers and several familial cancer predisposition disorders. Activation of AKT is a common event in tumors in which the PTEN gene has been inactivated. We previously showed that deletion of the murine Pten gene in embryonic stem (ES) cells led to increased phosphatidylinositol triphosphate (PIP 3) accumulation, enhanced entry into S phase, and better cell survival. Since PIP 3 controls multiple signaling molecules, it was not clear to what degree the observed phenotypes were due to deregulated AKT activity. In this study, we mutated Akt-1 in Pten−/− ES cells to directly assess the role of AKT-1 in PTEN-controlled cellular processes, such as cell proliferation, cell survival, and tumorigenesis in nude mice. We showed that AKT-1 is one of the major downstream effectors of PTEN in ES cells and that activation of AKT-1 is required for both the cell survival and cell proliferation phenotypes observed in Pten−/− ES cells. Deletion of Akt-1 partially reverses the aggressive growth of Pten−/− ES cells in vivo, suggesting that AKT-1 plays an essential role in PTEN-controlled tumorigenesis.