SGK3, which previously has been shown to play a key role in hair follicle development in mice, is a member of the AGC family of serine-threonine kinases. Mice lacking SGK3 have abnormal follicle cycling, which begins shortly after birth and ameliorates substantially with age. However, this developmental abnormality is not recapitulated in mice lacking closely related kinases Akt1, Akt2, or Akt3. To examine whether Akt2 interacts with SGK3 in postnatal hair development, we have generated and characterized Akt2/SGK3 double knockouts (DKOs). We find that the DKO mice have a defect in hair growth that is markedly worse than that of SGK3(-/-) mice and does not ameliorate with age. Morphologically, this defect is characterized by accelerated entry into catagen and through anagen, irregular hair follicle orientation, and increased expression of sebaceous glands. The defect is preceded by a profound failure to increase follicle matrix cell nuclear beta-catenin accumulation and proliferation at the onset of morphogenesis. Furthermore, in cultured keratinocytes, transfected Akt2 and SGK3 both stimulate transcription of a beta-catenin-LEF1-dependent reporter gene. Thus, SGK3 and Akt2 both appear to play important roles in postnatal hair follicle morphogenesis, likely because of their redundant regulation of beta-catenin-dependent transcriptional processes, which control hair follicle cell proliferation.