The protein kinase Akt controls myriad signaling processes in cells, ranging from growth and proliferation to differentiation and metabolism. Akt is activated by a combination of binding to the lipid second messenger PI(3,4,5)P₃ and its subsequent phosphorylation by phosphoinositide-dependent kinase 1 and mechanistic target of rapamycin complex 2. The relative contributions of these mechanisms to Akt activity and signaling have hitherto not been understood. Here, we show that phosphorylation and activation by membrane binding are mutually interdependent. Moreover, the converse is also true: Akt is more rapidly dephosphorylated in the absence of PIP₃, an autoinhibitory process driven by the interaction of its PH and kinase domains. We present biophysical evidence for the conformational changes in Akt that accompany its activation on membranes, show that Akt is robustly autoinhibited in the absence of PIP₃ irrespective of its phosphorylation, and map the autoinhibitory PH−kinase interface. Finally, we present a model for the activation and inactivation of Akt by an ordered series of membrane binding, phosphorylation, dissociation, and dephosphorylation events.