The regulation of intracellular localization of AFX, a human Forkhead transcription factor, was studied. AFX was recovered as a phosphoprotein from transfected COS-7 cells growing in the presence of FBS, and the phosphorylation was eliminated by wortmannin, a potent inhibitor of phosphatidylinositol (PI) 3-kinase. AFX was phosphorylated in vitro by protein kinase B (PKB), a downstream target of PI 3-kinase, but a mutant protein in which three putative phosphorylation sites of PKB had been replaced by Ala was not recognized by PKB. In Chinese hamster ovary cells (CHO-K1) cultured with serum, the AFX protein fused with green fluorescence protein (AFX-GFP) is localized mainly in the cytoplasm, and wortmannin induced transient nuclear translocation of the fusion protein. The AFX-GFP mutant in which all three phosphorylation sites had been replaced by Ala was detected exclusively in the cell nucleus. AFX-GFP was in the nucleus when the cells were infected with an adenovirus vector encoding a dominant-negative form of either PI 3-kinase or PKB, whereas the fusion protein stayed in the cytoplasm when the cells expressed constitutively active PKB. In CHO-K1 cells expressing AFX-GFP, DNA fragmentation was induced by the stable PI 3-kinase inhibitor LY294002, and the expression of the active form of PKB suppressed this DNA fragmentation. The phosphorylation site mutant of AFX-GFP enhanced DNA fragmentation irrespective of the presence and absence of PI 3-kinase inhibitor. These results indicate that the nuclear translocation of AFX is negatively regulated through its phosphorylation by PKB.