A neurosecretory pathway regulates a reversible developmental arrest and metabolic shift at the Caenorhabditis elegans dauer larval stage. Defects in an insulin-like signaling pathway cause arrest at the dauer stage. We show here that two C. elegansAkt/PKB homologs, akt-1 and akt-2,transduce insulin receptor-like signals that inhibit dauer arrest and that AKT-1 and AKT-2 signaling are indispensable for insulin receptor-like signaling in C. elegans. A loss-of-function mutation in the Fork head transcription factor DAF-16 relieves the requirement for Akt/PKB signaling, which indicates that AKT-1 and AKT-2 function primarily to antagonize DAF-16. This is the first evidence that the major target of Akt/PKB signaling is a transcription factor. An activating mutation in akt-1,revealed by a genetic screen, as well as increased dosage of wild-typeakt-1 relieves the requirement for signaling from AGE-1 PI3K, which acts downstream of the DAF-2 insulin/IGF-1 receptor homolog. This demonstrates that Akt/PKB activity is not necessarily dependent on AGE-1 PI3K activity. akt-1 andakt-2 are expressed in overlapping patterns in the nervous system and in tissues that are remodeled during dauer formation.