To elucidate the functions of the serine/threonine kinase Akt/PKB in vivo, we generated mice lacking both akt1 and akt2 genes. Akt1/Akt2 double-knockout (DKO) mice exhibit severe growth deficiency and die shortly after birth. These mice display impaired skin development because of a proliferation defect, severe skeletal muscle atrophy because of a marked decrease in individual muscle cell size, and impaired bone development. These defects are strikingly similar to the phenotypes of IGF-1 receptor-deficient mice and suggest that Akt may serve as the most critical downstream effector of the IGF-1 receptor during development. In addition, Akt1/Akt2 DKO mice display impeded adipogenesis. Specifically, Akt1 and Akt2 are required for the induced expression of PPARgamma, the master regulator of adipogenesis, establishing a new essential role for Akt in adipocyte differentiation. Overall, the combined deletion of Akt1 and Akt2 establishes in vivo roles for Akt in cell proliferation, growth, and differentiation. These functions of Akt were uncovered despite the observed lower level of Akt activity mediated by Akt3 in Akt1/Akt2 DKO cells, suggesting that a critical threshold level of Akt activity is required to maintain normal cell proliferation, growth, and differentiation.