The threonine and serine protein kinase AKT plays a major role in inhibiting apoptosis in a number of malignant cell types including prostate and breast carcinoma. Activation of AKT is a complex process involving translocation to the plasma membrane and phosphorylation of serine and threonine amino-acid residues. We now report that the novel compound 4-[3-(1-adamantyl)-4-hydroxyphenyl]-3-chlorocinnamic acid (3-Cl-AHPC), induces apoptosis in breast and prostate carcinoma cells and inhibits AKT activity in these cells. Overexpression of a constitutively activated AKT inhibits 3-Cl-AHPC-mediated apoptosis. Decrease in AKT activity occurs through 3-Cl-AHPC inhibition of phosphatidylinositol 3 kinase (PI3-K) activity. 3-Cl-AHPC inhibits PI3-K activity by enhancing epidermal growth factor receptor (EGFR) proteolysis and thus inhibiting EGFR association with the p85 subunit of PI3-K. 3-Cl-AHPC-mediated decrease in PI3-K activity results in the reduced synthesis of phosphatidylinositol 3,4 bisphosphate and phosphatidylinositol 3,4,5 triphosphate with the subsequent inhibition of integrin-linked kinase activity and serine-473 phosphorylation of AKT. Overexpression of EGFR results in increased AKT activity and inhibition of 3-Cl-AHPC-mediated decrease in AKT activation, AKT activity and 3-Cl-AHPC-mediated apoptosis. Inhibition of AKT activity by this compound results in the inability of AKT to phosphorylate and inactivate the proapoptotic forkhead transcription factor.