HAND2/dHAND is a basic helix-loop-helix transcription factor expressed in the heart and neural crest derivatives during embryogenesis. Although dHAND is essential for branchial arch, cardiovascular and limb development, its target genes have not been identified. The regulatory mechanisms of dHAND function also remain relatively unknown. Here we report that Akt/PKB, a serine/threonine protein kinase involved in cell survival, growth and differentiation, phosphorylates dHAND and inhibits dHAND-mediated transcription. AU5-dHAND expressed in 293T cells became phosphorylated, possibly at its Akt phosphorylation motif, in the absence of kinase inhibitors, whereas the phosphatidylinositol 3-kinase inhibitor wortmannin and the Akt inhibitor NL-71-101, but not the p70 S6 kinase inhibitor rapamycin, significantly reduced dHAND phosphorylation. Coexpression of HA-Akt augmented dHAND phosphorylation at multiple serine and threonine residues mainly located in the bHLH domain and, as a result, decreased the transcriptional activity of dHAND. Consistently, alanine mutation mimicking the nonphosphorylation state abolished the inhibitory effect of Akt on dHAND, whereas aspartate mutation mimicking the phosphorylation state resulted in a loss of dHAND transcriptional activity. These changes in dHAND transcriptional activity were in parallel with changes in the DNA binding activity rather than in dimerization activity. These results suggest that Akt-mediated signaling may regulate dHAND transcriptional activity through the modulation of its DNA binding activity during embryogenesis.