Deficiency in repair of damaged DNA leads to genomic instability and is closely associated with tumorigenesis. Most DNA double-strand-breaks (DSBs) are repaired by two major mechanisms, homologous-recombination (HR) and non-homologous-end-joining (NHEJ). Although Akt has been reported to suppress HR, its role in NHEJ remains elusive. Here, we report that Akt phosphorylates XLF at Thr181 to trigger its dissociation from the DNA ligase IV/XRCC4 complex, and promotes its interaction with 14-3-3β leading to XLF cytoplasmic retention, where cytosolic XLF is subsequently degraded by SCF(β-TRCP) in a CKI-dependent manner. Physiologically, upon DNA damage, XLF-T181E expressing cells display impaired NHEJ and elevated cell death. Whereas a cancer-patient-derived XLF-R178Q mutant, deficient in XLF-T181 phosphorylation, exhibits an elevated tolerance of DNA damage. Together, our results reveal a pivotal role for Akt in suppressing NHEJ and highlight the tight connection between aberrant Akt hyper-activation and deficiency in timely DSB repair, leading to genomic instability and tumorigenesis.