Akt signaling plays a central role in many biological functions, such as cell proliferation and apoptosis. Because Akt (also known as protein kinase B) resides primarily in the cytosol, it is not known how these signaling molecules are recruited to the plasma membrane and subsequently activated by growth factor stimuli. We found that the protein kinase Akt undergoes lysine-63 chain ubiquitination, which is important for Akt membrane localization and phosphorylation. TRAF6 was found to be a direct E3 ligase for Akt and was essential for Akt ubiquitination, membrane recruitment, and phosphorylation upon growth-factor stimulation. The human cancer-associated Akt mutant displayed an increase in Akt ubiquitination, in turn contributing to the enhancement of Akt membrane localization and phosphorylation. Thus, Akt ubiquitination is an important step for oncogenic Akt activation.