Serine threonine kinase AKT has a central role in the cell, controlling survival, proliferation, metabolism and angiogenesis. Deregulation of its activity underlies a wide range of pathological situations, including cancer. Here we show that AKT is post-translationally modified by the small ubiquitin-like modifier (SUMO) protein. Interestingly, neither SUMO conjugation nor activation of SUMOylated AKT is regulated by the classical AKT targeting to the cell membrane or by the phosphoinositide 3-kinase pathway. We demonstrate that SUMO induces the activation of AKT, whereas, conversely, down-modulation of the SUMO machinery diminishes AKT activation and cell proliferation. Furthermore, an AKT SUMOylation mutant shows reduced activation, and decreased anti-apoptotic and pro-tumoral activities in comparison with the wild-type protein. These results identify SUMO as a novel key regulator of AKT phosphorylation and activity.