The RET gene codes for a receptor tyrosine kinase that plays a crucial role during the development of both the enteric nervous system and the kidney. Germ line missense mutations at one of six codons specifying extracytoplasmic cysteines are responsible for two related cancer disorders as follows: multiple endocrine neoplasia type2A (MEN2A) and familial medullary thyroid carcinoma (FMTC). MEN2A and FMTC mutations result in a constitutive catalytic activity and as a consequence convert RET into a dominantly acting transforming gene. Although it has been shown that RET-MEN2 mutants activate several transduction pathways, their respective contribution to the neoplastic phenotype remains poorly understood. Over the past few years, it has become increasingly clear that the transforming ability of several viral and cellular oncoproteins depends on their capacity to activate phosphatidylinositol 3-kinase (PI3K). We now report that RET carrying a representative MEN2A mutation at Cys-634 (termed RET-MEN2A) activates PI3K and its downstream effector, the serine/threonine kinase AKT/protein kinase B. Previous studies have demonstrated that mutation of Tyr-1062, which is the intracellular docking site for Shc and Enigma on RET, abolishes the RET-MEN2A transforming activity. We provide evidence that mutation of Tyr-1062 abrogates the binding of the p85 regulatory subunit of PI3K to RET-MEN2A and the subsequent stimulation of the PI3K/AKT pathway. Furthermore, infection of rat fibroblasts with a retrovirus expressing a dominant-interfering form of PI3K suppresses RET-MEN2A-dependent transformation, whereas overexpression of AKT enhances the RET-MEN2A oncogenic potential. In summary, these data are consistent with the notion that RET-mediated cell-transforming effect is critically dependent on the activation of the PI3K/AKT pathway.