The influence of inositol phosphates and phosphoinositides on the alpha isoform of the RAC-protein kinase B (RAC/PKB) was studied using purified wild type and mutant kinase preparations and a recombinant pleckstrin homology (PH) domain. Binding of inositol phosphates and phosphoinositides to the PH domain was measured as the quenching of intrinsic tryptophan fluorescence. Inositol phosphates and D3-phosphorylated phosphoinositides bound with affinities of 1-10 microM and 0.5 microM, respectively. Similar values were obtained using RAC/PKB expressed and purified from baculovirus-infected Sf9 cells in the fluorescence assay. The influence of synthetic dioctanoyl derivatives of phosphatidylinositol 3,4-bisphosphate and phosphatidylinositol 3,4,5-trisphosphate on the activity of RAC/PKB purified from transfected COS-1 cells was studied. Phosphatidylinositol 3,4,5-trisphosphate was found to inhibit the RAC/PKB kinase activity with half-maximal inhibition at 2.5 microM. In contrast, phosphatidylinositol 3, 4-bisphosphate stimulated kinase activity (half-maximal stimulation at 2.5 microM). A mutant RAC/PKB protein lacking the PH domain was not affected by D3-phosphorylated phosphoinositides. These results demonstrate that the PH domain of RAC/PKB binds inositol phosphates and phosphoinositides with high affinity, and suggest that the products of the phosphatidylinositide 3-kinase can act as both a membrane anchor and modulator of RAC/PKB activity. The data also provide further evidence for a link between phosphatidylinositide 3-kinase and RAC/PKB regulation.