Background: Protein kinase B (PKB), and the p70 and p90 ribosomal S6 kinases (p70 S6 kinase and p90 Rsk, respectively), are activated by phosphorylation of two residues, one in the 'T-loop' of the kinase domain and, the other, in the hydrophobic motif carboxy terminal to the kinase domain. The 3-phosphoinositide-dependent protein kinase 1 (PDK1) activates many AGC kinases in vitro by phosphorylating the T-loop residue, but whether PDK1 also phosphorylates the hydrophobic motif and whether all other AGC kinases are substrates for PDK1 is unknown. Results: Mouse embryonic stem (ES) cells in which both copies of the PDK1 gene were disrupted were viable. In PDK1(-/-) ES cells, PKB, p70 S6 kinase and p90 Rsk were not activated by stimuli that induced strong activation in PDK1(+/+) cells. Other AGC kinases - namely, protein kinase A (PKA), the mitogen- and stress-activated protein kinase 1 (MSK1) and the AMP-activated protein kinase (AMPK) - had normal activity or were activated normally in PDK1(-/-) cells. The insulin-like growth factor 1 (IGF1) induced PKB phosphorylation at its hydrophobic motif, but not at its T-loop residue, in PDK1(-/-) cells. IGF1 did not induce phosphorylation of p70 S6 kinase at its hydrophobic motif in PDK1(-/-) cells. Conclusions: PDK1 mediates activation of PKB, p70 S6 kinase and p90 Rsk in vivo, but is not rate-limiting for activation of PKA, MSK1 and AMPK. Another kinase phosphorylates PKB at its hydrophobic motif in PDK1(-/-) cells. PDK1 phosphorylates the hydrophobic motif of p70 S6 kinase either directly or by activation of another kinase.