Alterations of the epidermal growth factor receptor (EGFR) gene are common in some forms of cancer and the most frequent is a deletion of exons 2-7. We have previously shown that this mutant receptor, called DeltaEGFR, confers enhanced tumorigenicity to glioblastoma cells through elevated proliferation and reduced apoptotic rates of the tumor cells in vivo. To understand the molecular mechanisms that underlie DeltaEGFR-enhanced proliferation, we examined the gene products that control cell cycle progression. We found that levels of the cyclin-dependent kinase (CDK) inhibitor, p27, were lower in U87MG.DeltaEGFR tumors than in parental U87MG or control U87MG.DK tumors. Consequently, CDK2-cyclin A activity was also elevated, concomitant with the RB protein hyperphosphorylation. In addition, activated phosphatidylinositol 3-kinase (PI3-K) and phosphorylated Akt levels were also elevated in the U87MG.DeltaEGFR tumors. U87MG.DeltaEGFR cells failed to arrest in G(1) in response to serum starvation in vitro and while maintaining high levels of PI3-K activity and hyperphosphorylated RB. Treatment of U87MG.DeltaEGFR cells with LY294002, a PI3-K inhibitor, caused reduced levels of phosphorylated Akt and concomitantly up-regulated levels of p27. Expression of a kinase dead dominant-negative Akt mutant in the U87MG.DeltaEGFR cells similarly resulted in up-regulation of p27 and down-regulation of tumorigenicity in vivo. These results suggest that the constitutively active DeltaEGFR can enhance cell proliferation in part by down-regulation of p27 through activation of the PI3-K/Akt pathway. This pathway may represent another therapeutic target for treatment of those aggressive glioblastomas expressing DeltaEGFR.