Phosphatidylinositol 3-kinase (PI3K)/protein kinase B (PKB/Akt) is thought to serve as an oncogenic signaling pathway which can be activated by Ras. The role of PI3K/Akt in Ras-mediated transformation of intestinal epithelial cells is currently not clear. Here we demonstrate that inducible expression of oncogenic Ha-Ras results in activation of PKB/Akt in rat intestinal epithelial cells (RIE-iHa-Ras), which was blocked by treatment with inhibitors of PI3K activity. The PI3K inhibitor, LY-294002, partially reversed the morphological transformation induced by Ha-Ras and resulted in a modest stimulation of apoptosis. The most pronounced phenotypic alteration following inhibition of PI3K was induction of G(1) phase cell cycle arrest. LY-294002 blocked the Ha-Ras-induced expression of cyclin D1, cyclin-dependent kinase (CDK) 2, and increased the levels of p27(kip). Both LY-294002 and wortmannin significantly reduced anchorage-independent growth of RIE-iHa-Ras cells. Forced expression of both the constitutively active forms of Raf (DeltaRaf-22W or Raf BXB) and Akt (Akt-myr) resulted in transformation of RIE cells that was not achieved by transfection with either the Raf mutant construct or Akt-myr alone. These findings delineate an important role for PI3K/Akt in Ras-mediated transformation of intestinal epithelial cells.