Activation of Akt, or protein kinase B, is frequently observed in human cancers. Here we report that Akt activation via overexpression of a constitutively active form or via the loss of PTEN can overcome a G(2)/M cell cycle checkpoint that is induced by DNA damage. Activated Akt also alleviates the reduction in CDC2 activity and mitotic index upon exposure to DNA damage. In addition, we found that PTEN null embryonic stem (ES) cells transit faster from the G(2)/M to the G(1) phase of the cell cycle when compared to wild-type ES cells and that inhibition of phosphoinositol-3-kinase (PI3K) in HEK293 cells elicits G(2) arrest that is alleviated by activated Akt. Furthermore, the transition from the G(2)/M to the G(1) phase of the cell cycle in Akt1 null mouse embryo fibroblasts (MEFs) is attenuated when compared to that of wild-type MEFs. These results indicate that the PI3K/PTEN/Akt pathway plays a role in the regulation of G(2)/M transition. Thus, cells expressing activated Akt continue to divide, without being eliminated by apoptosis, in the presence of continuous exposure to mutagen and accumulate mutations, as measured by inactivation of an exogenously expressed herpes simplex virus thymidine kinase (HSV-tk) gene. This phenotype is independent of p53 status and cannot be reproduced by overexpression of Bcl-2 or Myc and Bcl-2 but seems to counteract a cell cycle checkpoint mediated by DNA mismatch repair (MMR). Accordingly, restoration of the G(2)/M cell cycle checkpoint and apoptosis in MMR-deficient cells, through reintroduction of the missing component of MMR, is alleviated by activated Akt. We suggest that this new activity of Akt in conjunction with its antiapoptotic activity may contribute to genetic instability and could explain its frequent activation in human cancers.