Many extracellular signals stimulate phosphatidylinositol-3- kinase, which in turn activates the Rac1 GTPase, the protein kinase Akt and the Akt Thr 308 upstream kinase PDK1. Active Rac1 stimulates a number of events, including substrate phosphorylation by a subgroup of the PAK family of kinases. The combined effects of Rac1, PDK1 and Akt are crucial for cell migration, growth, survival, metabolism and tumorigenesis. Here we show that Rac1 stimulates a second, kinase-independent function of PAK1. The PAK1 kinase domain serves as a scaffold to facilitate Akt stimulation by PDK1 and to aid recruitment of Akt to the membrane. PAK differentially activates subpopulations of Akt. These findings reveal scaffolding functions of PAK that regulate the efficiency, localization and specificity of the PDK1-Akt pathway.