The PH domain leucine-rich repeat protein phosphatase, PHLPP, plays a central role in controlling the amplitude of growth factor signaling by directly dephosphorylating and thereby inactivating Akt. The cellular levels of PHLPP1 have recently been shown to be enhanced by its substrate, activated Akt, via modulation of a phosphodegron recognized by the E3 ligase β-TrCP1, thus providing a negative feedback loop to tightly control cellular Akt output. Here we show that this feedback loop is lost in aggressive glioblastoma but not less aggressive astrocytoma. Overexpression and pharmacological studies reveal that loss of the feedback loop does not result from a defect in PHLPP1 protein or in the upstream kinases that control its phosphodegron. Rather, the defect arises from altered localization of β-TrCP1; in astrocytoma cell lines and in normal brain tissue the E3 ligase is predominantly cytoplasmic, whereas in glioblastoma cell lines and patient-derived tumor neurospheres, the E3 ligase is confined to the nucleus and thus spatially separated from PHLPP1, which is cytoplasmic. Restoring the localization of β-TrCP1 to the cytosol of glioblastoma cells rescues the ability of Akt to regulate PHLPP1 stability. Additionally, we show that the degradation of another β-TrCP1 substrate, β-catenin, is impaired and accumulates in the cytosol of glioblastoma cell lines. Our findings reveal that the cellular localization of β-TrCP1 is altered in glioblastoma, resulting in dysregulation of PHLPP1 and other substrates such as β-catenin.