Papillary thyroid carcinoma (PTC) is a heterogenous disorder characterized by unique gene rearrangements and gene mutations that activate signaling pathways responsible for cellular transformation, survival, and antiapoptosis. Activation of protein kinase B (PKB) and its downstream signaling pathways appears to be an important event in thyroid tumorigenesis. In this study, we found that the thyroid-specific oncogenic RET/PTC tyrosine kinase is able to phosphorylate PKB in vitro and in vivo. RET/PTC-transfected cells showed tyrosine phosphorylation of endogenous and exogenous PKB, which was independent of phosphorylation of T308 and S473 regulated by the upstream kinases phosphoinositide-dependent kinase-1 and -2, respectively. The PKB Y315 residue, which is known to be phosphorylated by Src tyrosine kinase, was also a major site of phosphorylation by RET/PTC. RET/PTC-mediated tyrosine phosphorylation results in the activation of PKB kinase activity. The activation of PKB by RET/PTC blocked the activity of the forkhead transcription factor, FKHRL1, but a Y315F mutant of PKB failed to inhibit FKHRL1 activity. In summary, these observations suggest that RET/PTC is able to phosphorylate the Y315 residue of PKB, an event that results in maximal activation of PKB for RET/PTC-induced thyroid tumorigenesis.