The protein kinase Akt is activated by growth factors and promotes cell survival and cell cycle progression. Here, we demonstrate that Akt phosphorylates the cell cycle inhibitory protein p21(Cip1) at Thr 145 in vitro and in intact cells as shown by in vitro kinase assays, site-directed mutagenesis, and phospho-peptide analysis. Akt-dependent phosphorylation of p21(Cip1) at Thr 145 prevents the complex formation of p21(Cip1) with PCNA, which inhibits DNA replication. In addition, phosphorylation of p21(Cip1) at Thr 145 decreases the binding of the cyclin-dependent kinases Cdk2 and Cdk4 to p21(Cip1) and attenuates the Cdk2 inhibitory activity of p21(Cip1). Immunohistochemistry and biochemical fractionation reveal that the decrease of PCNA binding and regulation of Cdk activity by p21(Cip1) phosphorylation is not caused by altered intracellular localization of p21(Cip1). As a functional consequence, phospho-mimetic mutagenesis of Thr 145 reverses the cell cycle-inhibitory properties of p21(Cip1), whereas the nonphosphorylatable p21(Cip1) T145A construct arrests cells in G(0) phase. These data suggest that the modulation of p21(Cip1) cell cycle functions by Akt-mediated phosphorylation regulates endothelial cell proliferation in response to stimuli that activate Akt.