Phosphorylation of a threonine residue (T308 in Akt1) in the activation loop of Akt kinases is a prerequisite for deregulated Akt activity frequently observed in neoplasia. Akt phosphorylation in vivo is balanced by the opposite activities of kinases and phosphatases. Here we describe that targeting Akt kinase to the cell membrane markedly reduced sensitivity of phosphorylated Akt to dephosphorylation by protein phosphatase 2A. This effect was amplified by occupancy of the ATP binding pocket by either ATP or ATP-competitive inhibitors. Mutational analysis revealed that R273 in Akt1 and the corresponding R274 in Akt2 are essential for shielding T308 in the activation loop against dephosphorylation. Thus, occupancy of the nucleotide binding pocket of Akt kinases enables intramolecular interactions that restrict phosphatase access and sustain Akt phosphorylation. This mechanism provides an explanation for the "paradoxical" Akt hyperphosphorylation induced by ATP-competitive inhibitor, A-443654. The lack of phosphatase resistance further contributes insight into the mechanism by which the human Akt2 R274H missense mutation may cause autosomal-dominant diabetes mellitus. T he serine/threonine Akt protein kinases (Akt1, Akt2, and Akt3) affect multiple cellular functions related to cell growth and survival, differentiation, metabolism, and migration (reviewed in refs. 1, 2). Essential functions of Akt kinases in mammalian physiology are highlighted by retarded growth and increased neonatal mortality in Akt1 knockout mice, severe diabetes in Akt2 knockout mice, and reduced brain size in Akt3 knockout animals (reviewed in ref. 3). Furthermore, an inherited inactivating mutation in Akt2-R274 has been linked to autosomal-dominant severe insulin resistance and diabetes mellitus in humans (4).The activation state of Akt is regulated by controlling phosphorylation of two regulatory residues in its centrally located activation loop (T308 in Akt1) and in the carboxyl-terminal tail (S473 in Akt1) by two separate kinases (PDK1 and PDK2) (reviewed in refs. 1, 2). Phosphorylation of these regulatory sites is enabled by conformational changes induced by docking of the Akt pleckstrin homology (PH) domain to the membrane lipid products, PtdInsð3;4;5ÞP 3 or PtdInsð3;4ÞP 2 . PDK-dependent Akt1 phosphorylation is reversed by the abundantly expressed protein phosphatase 2A (PP2A) which dephosphorylates pT308 and, to a lesser extent, pS473 (5, 6). Specifically, Akt has been identified as the substrate of a complex containing the regulatory B55α or B56β subunits of PP2A in Caenorhabditis elegans, Drosophila melanogaster, and in mammalian cells (7-9). The functional relevance of B56β-containing PP2A to Akt regulation is further underscored by genetic studies in C. elegans demonstrating modulation of insulin/insulin-like growth factor effects on longevity, fat metabolism, and stress resistance by this phosphatase (9).Hyperactivation and phosphorylation of Akt kinases is commonly observed in diverse tumor types and has motivated the developmen...