AKT was originally identified as a proto-oncogene with a pleckstrin homology and Ser/Thr protein kinase domains. Recent studies revealed that AKT regulates a variety of cellular functions including cell survival, cell growth, cell differentiation, cell cycle progression, transcription, translation, and cellular metabolism. To clarify the substrate specificity of AKT, we have used an oriented peptide library approach to determine optimal amino acids at positions N-terminal and C-terminal to the site of phosphorylation. The predicted optimal peptide substrate (Arg-Lys-Arg-Xaa-Arg-Thr-Tyr-Ser*-Phe-Gly where Ser* is the phosphorylation site) has similarities to but is distinct from optimal substrates that we previously defined for related basophilic protein kinases such as protein kinase A, Ser/Arg-rich kinases, and protein kinase C family members. The positions most important for high V(max)/K(m) ratio were Arg-3>Arg-5>Arg-7. The substrate specificity of AKT was further investigated by screening a lambdaGEX phage HeLa cell cDNA expression library. All of the substrates identified by this procedure contained Arg-Xaa-Arg-Xaa-Xaa-(Ser/Thr) motifs and were in close agreement with the motif identified by peptide library screening. The results of this study should help in prediction of likely AKT substrates from primary sequences.