Protein kinase Akt, an important downstream target of phosphatidylinositol 3-kinase, is one of the major survival factors in mammalian cells. It has been shown that phosphorylation of the C-terminal hydrophobic motif is required for Akt activation. The activated Akt then phosphorylates several pro-apoptotic proteins and prevents apoptosis mediated by caspases and the mitochondria. Interestingly, Akt has also been implicated to be a direct substrate of caspases in apoptotic cells induced by Fas (Widmann, C., Gibson, S., and Johnson, G. L. (1998) J. Biol. Chem. 273, 7141-7147) and anoikis (Bachelder, R. E., Wendt, M. A., Fujita, N., Tsuruo, T., and Mercurio, A. M. (2001) J. Biol. Chem. 276, 34702-34707). In this study we showed that cytokine withdrawal resulted in Akt degradation by caspases as well. Furthermore, we demonstrated residue Asp-462 of Akt1 which is just upstream of the hydrophobic motif to be the primary cleavage site. The Akt1 mutant (D462N) that prevented caspase cleavage was more stable during factor withdrawal and enhanced cell survival. The Akt truncation mutant mimicking the caspase cleavage product lost its kinase activity and functioned as a dominant negative to promote cell death. Our results suggest that the balance between Akt and caspase activity controls cell survival. In particular, caspases are able to render Akt inactive and dominantly inhibit the Akt pathway by cleaving off the C-terminal hydrophobic motif. Consequently, the survival signal is quickly down-regulated to allow apoptosis to occur.