The serine/threonine kinase LKB1 regulates various cellular processes such as cell proliferation, energy homeostasis and cell polarity and is frequently downregulated in various tumours. Many downstream pathways controlled by LKB1 have been described but little is known about the upstream regulatory mechanisms. Here we show that targeting of the kinase to the membrane by a direct binding of LKB1 to phosphatidic acid is essential to fully activate its kinase activity. Consequently, LKB1 mutants that are deficient for membrane binding fail to activate the downstream target AMPK to control mTOR signalling. Furthermore, the in vivo function of LKB1 during development of Drosophila depends on its capacity to associate with membranes. Strikingly, we find LKB1 to be downregulated in malignant melanoma, which exhibit aberrant activation of Akt and overexpress phosphatidic acid generating Phospholipase D. These results provide evidence for a fundamental mechanism of LKB1 activation and its implication in vivo and during carcinogenesis.