Recently, the FOXO (Forkhead box, class O) subfamily of Forkhead transcription factors has been identified as direct targets of phosphoinositide 3-kinase-mediated signal transduction. The AFX (acute-lymphocytic-leukaemia-1 fused gene from chromosome X), FKHR (Forkhead in rhabdomyosarcoma) and FKHR-L1 (FKHR-like 1) transcription factors are directly phosphorylated by protein kinase B, resulting in nuclear export and inhibition of transcription. This signalling pathway was first identified in the nematode worm Caenorhabditis elegans, where it has a role in regulation of the life span of the organism. Studies have shown that this evolutionarily conserved signalling module has a role in regulation of both cell-cycle progression and cell survival in higher eukaryotes. These effects are co-ordinated by FOXO-mediated induction of a variety of specific target genes that are only now beginning to be identified. Interestingly, FOXO transcription factors appear to be able to regulate transcription through both DNA-binding-dependent and -independent mechanisms. Our understanding of the regulation of FOXO activity, and defining specific transcriptional targets, may provide clues to the molecular mechanisms controlling cell fate decisions to divide, differentiate or die.