Recent studies indicate that phosphatidylinositide-3OH kinase (PI3K)-induced S6 kinase (S6K1) activation is mediated by protein kinase B (PKB). Support for this hypothesis has largely relied on results obtained with highly active, constitutively membrane-localized alleles of wild-type PKB, whose activity is independent of PI3K. Here we set out to examine the importance of PKB signaling in S6K1 activation. In parallel, glycogen synthase kinase 3beta (GSK-3beta) inactivation and eukaryotic translation initiation factor 4E-binding protein 1 (4E-BP1) phosphorylation were monitored as markers of the rapamycin-insensitive and -sensitive branches of the PI3K signaling pathway, respectively. The results demonstrate that two activated PKBalpha mutants, whose basal activity is equivalent to that of insulin-induced wild-type PKB, inhibit GSK-3beta to the same extent as a highly active, constitutively membrane-targeted wild-type PKB allele. However, of these two mutants, only the constitutively membrane-targeted allele of PKB induces S6K1 activation. Furthermore, an interfering mutant of PKB, which blocks insulin-induced PKB activation and GSK-3beta inactivation, has no effect on S6K1 activation. Surprisingly, all the activated PKB mutants, regardless of constitutive membrane localization, induce 4E-BP1 phosphorylation and the interfering PKB mutant blocks insulin-induced 4E-BP1 phosphorylation. The results demonstrate that PKB mediates S6K1 activation only as a function of constitutive membrane localization, whereas the activation of PKB appears both necessary and sufficient to induce 4E-BP1 phosphorylation independently of its intracellular location.