Aberrant activation of AKT disturbs the proliferation, survival and metabolic homeostasis of various human cancers. Thus, it is critical to understand the upstream signalling pathways governing AKT activation. Here, we report that AKT undergoes SETDB1-mediated lysine methylation to promote its activation, which is antagonized by the Jumonji-family demethylase KDM4B. Notably, compared with wild-type mice, mice harbouring non-methylated mutant Akt1 not only exhibited reduced body size but were also less prone to carcinogen-induced skin tumours, in part due to reduced AKT activation. Mechanistically, the interaction of phosphatidylinositol (3,4,5)-trisphosphate with AKT facilitates its interaction with SETDB1 for subsequent AKT methylation, which in turn sustains AKT phosphorylation. Pathologically, genetic alterations, including SETDB1 amplification, aberrantly promote AKT methylation to facilitate its activation and oncogenic functions. Thus, AKT methylation is an important step, synergizing with PI3K signalling to control AKT activation. This suggests that targeting SETDB1 signalling could be a potential therapeutic strategy for combatting hyperactive AKT-driven cancers.