Lipid rafts are cholesterol-rich plasma membrane domains that regulate signal transduction. Because our earlier work indicated that raft disruption inhibited proliferation and caused cell death, we investigated here the role of membrane cholesterol, the crucial raft constituent, in the regulation of the phosphatidylinositol-3 kinase (PI3K)/Akt pathway. Raft disruption was achieved in normal human keratinocytes and precancerous (HaCaT) or transformed (A431) keratinocytes by cholesterol extraction or inactivation with methyl-beta-cyclodextrin, filipin III, or 5-cholestene-5-beta-ol. Lipid raft disruption did not affect PI3K binding to its main target, the epidermal growth factor receptor, nor its ability to convert phosphatidylinositol 4,5-bisphosphate to phosphatidylinositol 3,4,5-trisphosphate but impaired Akt phosphorylation at the regulatory sites Thr(308) and Ser(473). Diminished Akt activity resulted in deactivation of mammalian target of rapamycin, activation of FoxO3a, and increased sensitivity to apoptosis stimuli. Lipid raft disruption abrogated the binding of Akt and the major Akt kinase, phosphatidylinositol-dependent kinase 1, to the membrane by pleckstrin-homology domains. Thus, the integrity of lipid rafts is required for the activity of Akt and cell survival and may serve as a potential pharmacological target in the treatment of epidermal cancers.