p21(Cip1/WAF1) (p21), a p53-inducible protein, is a critical regulator of cell cycle and cell survival. p21 binds to and inhibits both the DNA synthesis regulator proliferating cell nuclear antigen and cyclin A/E-CDK2 complexes. Recently, p21 has also been shown to be a positive regulator of cell cycle progression as p21 is necessary for the assembly and activation of cyclin D1-CDK4/6 complexes. Furthermore, elevated p21 protein levels have been observed in various aggressive tumors as well as linked to chemoresistance. Here we demonstrate that p21 is directly phosphorylated by AKT/PKB, a survival kinase that is hyperactivated in many late stage tumors. Two sites (Thr(145) and Ser(146)) in the carboxyl terminus of p21 are phosphorylated by AKT/PKB in vitro and in vivo. Phosphorylation of Thr(145) inhibits PCNA binding, whereas phosphorylation of Ser(146) significantly increases p21 protein stability. Glioblastoma cell lines with activated AKT/PKB show enhanced p21 stability, and they are more resistant to taxol-mediated toxicity. Finally, AKT/PKB controls the assembly of cyclin D1-CDK4 complexes through modulation of p21 and cyclin D1 levels. These data imply that enhanced levels of p21 in tumors are due, in part, to phosphorylation by activated AKT/PKB. Furthermore, they suggest that one mechanism of AKT/PKB regulation of tumor cell survival and/or proliferation is to stabilize p21 protein.