Protein kinase B (PKB) is a proto-oncogene that is activated in signaling pathways initiated by phosphoinositide 3-kinase. Chromatographic separation of brain cytosol revealed a kinase activity that phosphorylated and activated PKB only in the presence of phosphatidylinositol-3,4,5-trisphosphate [PtdIns(3,4,5)P3]. Phosphorylation occurred exclusively on threonine-308, a residue implicated in activation of PKB in vivo. PtdIns(3,4,5)P3 was determined to have a dual role: Its binding to the pleckstrin homology domain of PKB was required to allow phosphorylation by the upstream kinase and it directly activated the upstream kinase.