The transactivation of nuclear receptors is regulated by both ligand binding and phosphorylation. We previously showed that RARalpha (retinoic acid receptor alpha) phosphorylation by c-Jun N-terminal kinase contributes to retinoid resistance in a subset of NSCLC cells (non-small cell lung cancer cells), but the aetiology of this resistance in the remainder has not been fully elucidated [Srinivas, Juroske, Kalyankrishna, Cody, Price, Xu, Narayanan, Weigel and Kurie (2005) Mol. Cell. Biol. 25, 1054-1069]. In the present study, we report that Akt, which is constitutively activated in NSCLC cells, phosphorylates RARalpha and inhibits its transactivation. Biochemical and functional analyses showed that Akt interacts with RARalpha and phosphorylates the Ser96 residue of its DNA-binding domain. Mutation of Ser96 to alanine abrogated the suppressive effect of Akt. Overexpression of a dominant-negative form of Akt in an NSCLC cell line decreased RAR phosphorylation, increased RAR transactivation and enhanced the growth-inhibitory effects of an RAR ligand. The findings presented here show that Akt inhibits RAR transactivation and contributes to retinoid resistance in a subset of NSCLC cells.