To investigate the role of Akt in nerve growth factor (NGF)-induced neuronal differentiation, PC12 cells ectopically expressing wild-type or dominant-inhibitory forms of Akt were analyzed. NGF-induced neurite outgrowth was greatly accelerated in cells expressing dominant-inhibitory Akt, compared to parental PC12 cells, but was almost completely blocked in cells expressing wild-type Akt. Since neuronal differentiation requires an arrest of cell growth, several aspects of cell growth of the different cell lines were compared. Cells expressing wild-type Akt were not susceptible to the growth-arresting effect of NGF, whereas parental PC12 cells and notably cells expressing mutant Akt were so affected. Accompanying this, the expressions of CDKs and p21(WAF1) were down- and up-regulated, respectively, in both parental PC12 cells and cells expressing mutant Akt. When treated with some growth arrest-inducing agents such as sodium nitroprusside, forskolin and butyrolactone I, cells expressing wild-type Akt regained their responsiveness to the effects of NGF on differentiation. In summary, our results indicate that Akt overrides the growth-arresting effect of NGF and thereby, negatively regulates neuronal differentiation.