The Akt pathway is frequently hyperactivated in human cancer and functions as a cardinal nodal point for transducing extracellular and intracellular oncogenic signals and, thus, presents an exciting target for molecular therapeutics. Here we report the identification of a small molecule Akt/protein kinase B inhibitor, API-1. Although API-1 is neither an ATP competitor nor substrate mimetic, it binds to pleckstrin homology domain of Akt and blocks Akt membrane translocation. Furthermore, API-1 treatment of cancer cells results in inhibition of the kinase activities and phosphorylation levels of the three members of the Akt family. In contrast, API-1 had no effects on the activities of the upstream Akt activators, phosphatidylinositol 3-kinase, phosphatidylinositol-dependent kinase-1, and mTORC2. Notably, the kinase activity and phosphorylation (e.g. Thr(P)(308) and Ser(P)(473)) levels of constitutively active Akt, including a naturally occurring mutant AKT1-E17K, were inhibited by API-1. API-1 is selective for Akt and does not inhibit the activation of protein kinase C, serum and glucocorticoid-inducible kinase, protein kinase A, STAT3, ERK1/2, or JNK. The inhibition of Akt by API-1 resulted in induction of cell growth arrest and apoptosis selectively in human cancer cells that harbor constitutively activated Akt. Furthermore, API-1 inhibited tumor growth in nude mice of human cancer cells in which Akt is elevated but not of those cancer cells in which it is not. These data indicate that API-1 directly inhibits Akt through binding to the Akt pleckstrin homology domain and blocking Akt membrane translocation and that API-1 has anti-tumor activity in vitro and in vivo and could be a potential anti-cancer agent for patients whose tumors express hyperactivated Akt.