3-phosphoinositide-dependent kinase-1 (PDK1) phosphorylates and activates several kinases in the cAMP-dependent, cGMP-dependent and protein kinase C (AGC) family. Many putative PDK1 substrates have been identified, but have not been analyzed following transient and specific inhibition of PDK1 activity. Here, we demonstrate that a previously characterized PDK1 inhibitor, BX-795, shows biological effects that are not consistent with PDK1 inhibition. Therefore, we describe the creation and characterization of a PDK1 mutant, L159G, which can bind inhibitor analogues containing bulky groups that hinder access to the ATP binding pocket of wild type (WT) kinases. When expressed in PDK1(-/-) ES cells, PDK1 L159G restored phosphorylation of PDK1 targets known to be hypophosphorylated in these cells. Screening of multiple inhibitor analogues showed that 1-NM-PP1 and 3,4-DMB-PP1 optimally inhibited the phosphorylation of PDK1 targets in PDK1(-/-) ES cells expressing PDK1 L159G but not WT PDK1. These compounds confirmed previously assumed PDK1 substrates, but revealed distinct dephosphorylation kinetics. While PDK1 inhibition had little effect on cell growth, it sensitized cells to apoptotic stimuli. Furthermore, PDK1 loss abolished growth of allograft tumors. Taken together we describe a model system that allows for acute and reversible inhibition of PDK1 in cells, to probe biochemical and biological consequences.