PHLPP is a family of Ser/Thr protein phosphatases that contains PHLPP1 and PHLPP2 isoforms. We have shown previously that PHLPP functions as a tumor suppressor by negatively regulating Akt signaling in cancer cells. Here we report the identification of ribosomal protein S6 kinase 1 (S6K1) as a novel substrate of PHLPP. Overexpression of both PHLPP isoforms resulted in a decrease in S6K1 phosphorylation in cells, and this PHLPP-mediated dephosphorylation of S6K1 was independent of its ability to dephosphorylate Akt. Conversely, S6K1 phosphorylation was increased in cells depleted of PHLPP expression. Furthermore, we showed that the insulin receptor substrate 1 (IRS-1) expression and insulin-induced Akt phosphorylation were significantly decreased as the result of activation of the S6K-dependent negative feedback loop in PHLPP knockdown cells. Functionally, the phosphorylation of ribosomal protein S6 (rpS6) and the amount of phosphorylated rpS6 bound to the translation initiation complex were increased in PHLPP-knockdown cells. This correlated with increased cell size, protein content, and rate of cap-dependent translation. Taken together, our results demonstrate that loss of PHLPP expression activates the S6K-dependent negative feedback loop and that PHLPP is a novel player involved in regulating protein translation initiation and cell size via direct dephosphorylation of S6K1.Precise control of cell signaling is achieved by balancing a vast pool of protein phosphorylation events with a limited number of protein phosphatases. The involvement of protein phosphatases in regulating many fundamentally important cellular processes has been appreciated only recently (32). PHLPP represents a novel family of Ser/Thr protein phosphatases. Two isoforms of PHLPP, namely, PHLPP1 and PHLPP2, sharing ϳ50% identity at the amino acid level, are found in this phosphatase family (3,8). To date, members of the AGC kinase superfamily, including Akt and conventional protein kinase C (PKC) isozymes, have been identified as substrates of PHLPP. Both Akt and PKC are known to be regulated by protein phosphorylation, and PHLPP-mediated dephosphorylation leads to inactivation or accelerated degradation (2). In the case of Akt, our previous studies demonstrate that PHLPP-mediated dephosphorylation of Akt results in an increase in apoptosis and a decrease in cell proliferation, and loss of PHLPP expression occurs with high frequency in colorectal cancers (3,8,16). In the case of PKC, the cellular expression level of conventional PKC isozymes is negatively regulated by PHLPP, as PHLPP-mediated dephosphorylation leads to degradation of PKC (7). Intriguingly, PHLPP preferentially dephosphorylates the hydrophobic motif of both Akt and PKC, demonstrating a unique specificity not commonly observed in Ser/Thr protein phosphatases (2). Given the fact that the hydrophobic motif phosphorylation site is highly conserved within members of the AGC kinase superfamily, it is of particular interest to investigate whether other kinases in this family are als...