Between 30% and 50% of patients with advanced-stage anaplastic large-cell lymphoma (ALCL) harbor the balanced chromosomal rearrangement t(2;5)(p23;q35), which results in the generation of the fusion protein nucleophosmin-anaplastic lymphoma kinase (NPM-ALK). To further study survival signaling by NPMALK, we generated Ba/F3 cell lines with either inducible or constitutive expression of NPM-ALK and examined the regulation of the AKT target FOXO3a. We hypothesized that NPM-ALK signaling through phosphoinositol 3-kinase (PI 3-kinase) and AKT would regulate FOXO3a, a member of the forkhead family of transcription factors, thereby stimulating proliferation and blocking programmed cell death in NPM-ALK-transformed cells. In Ba/F3 cells with induced or constitutive expression of NPM-ALK, concomitant AKT activation and phosphorylation of its substrate, FOXO3a, was observed. In addition, transient expression of NPM-ALK in U-20S cells inhibited FOXO3a-mediated transactivation of reporter gene expression. Furthermore, NPM-ALK-induced FOXO3a phosphorylation in Ba/F3 cells resulted in nuclear exclusion of this transcriptional regulator, up-regulation of cyclin D2 expression, and down-regulation of p27(kip1) and Bim-1 expression. NPMALK reversal of proliferation arrest and of p27(kip1) induction was dependent on the phosphorylation of FOXO3a. Thus, FOXO3a is a barrier to hematopoietic transformation that is overcome by phosphorylation and cytoplasmic relocalization induced by the expression of NPM-ALK.