We developed anti-Akt1 single-chain antibodies (scFv) by panning a mouse phage-displayed scFv recombinant antibody library. Recombinant scFv that bound glutathione S-transferase (GST)-Akt1 were screened for their ability to inhibit Akt activity in vitro in a kinase reaction containing human recombinant Akt1 and an Akt/serum glucocorticoid-inducible kinase (SGK) substrate. Michaelis-Menten analysis of kinase inhibition by a selected scFv was consistent with scFv-mediated competition with enzyme's substrate for the catalytic site of Akt. To generate a membrane-permeable version of the anti-Akt1 scFv, the scFv gene was subcloned into a GST expression vector carrying a membrane-translocating sequence (MTS) from Kaposi fibroblast growth factor. A purified GST-anti-Akt1-MTS fusion protein accumulated intracellularly in 293T, BT-474, and PyVmT cells in a dose- and time-dependent fashion. Intracellular accumulation correlated temporally with inhibition of p-Ser(473) Akt and GSK-3alpha/beta phosphorylation, suggesting that Ser(473) is an Akt autophosphorylation site. Phosphorylated (activated) phosphoinositide-dependent kinase 1, mitogen-activated protein kinase, p38, and HER2 (erbB2) were not affected, supporting Akt kinase specificity for the inhibitory scFv. Exogenously expressed constitutively active Akt2 and Akt3 were also inhibited in vitro by the anti-Akt1 fusion protein. Furthermore, GST-anti-Akt1-MTS induced apoptosis in three cancer cell lines that express constitutively active Akt. Finally, systemic treatment with the anti-Akt scFv reduced tumor volume and neovascularization and increased apoptosis in PyVmT-expressing transgenic tumors implanted in mouse dorsal window chambers. Thus, GST-anti-Akt1-MTS is a novel cell-permeable inhibitor of Akt, which selectively inhibits Akt-mediated survival in intact cells both in vitro and in vivo.