Amplification or overexpression of HER-2/neu in cancer cells confers resistance to apoptosis and promotes cell growth. The cellular localization of p21 Cip1/WAF1 has been proposed to be critical either in promoting cell survival or in inhibiting cell growth. Here we show that HER-2/neu-mediated cell growth requires the activation of Akt, which associates with p21 Cip1/WAF1 and phosphorylates it at threonine 145, resulting in cytoplasmic localization of p21 Cip1/WAF1. Furthermore, blocking the Akt pathway with a dominant-negative Akt mutant restores the nuclear localization and cell-growth-inhibiting activity of p21 Cip1/WAF1. Our results indicate that HER-2/neu induces cytoplasmic localization of p21 Cip1/WAF1 through activation of Akt to promote cell growth, which may have implications for the oncogenic activity of HER-2/neu and Akt.