Mechanisms linking mitogenic and growth inhibitory cytokine signaling and the cell cycle have not been fully elucidated in either cancer or in normal cells. Here we show that activation of protein kinase B (PKB)/Akt, contributes to resistance to antiproliferative signals and breast cancer progression in part by impairing the nuclear import and action of p27. Akt transfection caused cytoplasmic p27 accumulation and resistance to cytokine-mediated G1 arrest. The nuclear localization signal of p27 contains an Akt consensus site at threonine 157, and p27 phosphorylation by Akt impaired its nuclear import in vitro. Akt phosphorylated wild-type p27 but not p27T157A. In cells transfected with constitutively active Akt(T308DS473D)(PKB(DD)), p27WT mislocalized to the cytoplasm, but p27T157A was nuclear. In cells with activated Akt, p27WT failed to cause G1 arrest, while the antiproliferative effect of p27T157A was not impaired. Cytoplasmic p27 was seen in 41% (52 of 128) of primary human breast cancers in conjunction with Akt activation and was correlated with a poor patient prognosis. Thus, we show a novel mechanism whereby Akt impairs p27 function that is associated with an aggressive phenotype in human breast cancer.