Akt is a critical regulator of cell growth, proliferation, and survival that is activated by phosphatidylinositol 3-kinase (PI3K). We investigated the effect of PI3K inhibition on activation of sterol regulatory element binding protein-2 (SREBP-2), a master regulator of cholesterol homeostasis. SREBP-2 processing increased in response to various cholesterol depletion approaches (including statin treatment) and this increase was blunted by treatment with a potent and specific inhibitor of PI3K, LY294002, or when a plasmid encoding a dominant-negative form of Akt (DN-Akt) was expressed. LY294002 also suppressed SREBP-2 processing induced by insulin-like growth factor-1. Furthermore, LY294002 treatment down-regulated SREBP-2 or -1c gene targets and decreased cholesterol and fatty acid synthesis. Fluorescence microscopy studies indicated that LY294002 disrupts transport of the SREBP escort protein, SCAP, from the endoplasmic reticulum to the Golgi. This disruption was also shown by immunofluorescence staining when DN-Akt was expressed. Taken together, our studies indicate that the PI3K/Akt pathway is involved in SREBP-2 transport to the Golgi, contributing to the control of SREBP-2 activation. Our results provide a crucial mechanistic link between the SREBP and PI3K/Akt pathways that may be reconciled teleologically because synthesis of new membrane is an absolute requirement for cell growth and proliferation. © 2006 by The American Society for Cell Biology.