Autophagy is an evolutionarily conserved mechanism for the gross disposal of intracellular proteins in mammalian cells and dysfunction in this pathway has been associated with human disease. Although the serine threonine kinase Akt is suggested to play a role in this process, little is known about the molecular mechanisms by which Akt induces autophagy. Using a yeast two‐hybrid screen, Phafin2, a lysosomal protein with a unique structure of N‐terminal PH (pleckstrin homology) domain and C‐terminal FYVE (Fab 1, YOTB, Vac 1, and EEA1) domain was found to interact with Akt. A sucrose gradient fractionation experiment revealed that both Akt and Phafin2 co‐existed in the same lysosome enriched fraction after autophagy induction. Confocal microscopic analysis and BiFC analysis demonstrated that both Akt and Phafin2 accumulate in the lysosome after induction of autophagy. BiFC analysis using PtdIns (3)P interaction defective mutant of Phafin2 demonstrated that lysosomal accumulation of the Akt‐Phafin2 complex and subsequent induction of autophagy were lysosomal PtdIns (3)P dependent events. Furthermore, in murine macrophages, both Akt and Phafin2 were required for digestion of fluorescent bacteria and/or LPS‐induced autophagy. Taken together, these findings establish that lysosomal accumulation of Akt and Phafin2 is a critical step in the induction of autophagy via an interaction with PtdIns (3)P.