AKT is a critical effector kinase downstream of the PI3K pathway that regulates a plethora of cellular processes including cell growth, death, differentiation and migration. Mechanisms underlying activated phospho-AKT (pAKT) translocation to its action sites remain unclear. Here we show that NEDD4-1 is a novel E3 ligase that specifically regulates ubiquitin-dependent trafficking of pAKT in IGF-1 signaling. NEDD4-1 physically interacts with AKT and promotes HECT domain-dependent ubiquitination of exogenous and endogenous AKT. NEDD4-1 catalyzes K63-type polyubiquitin chain formation on AKT in vitro. Plasma membrane binding is the key step for AKT ubiquitination by NEDD4-1 in vivo. Ubiquitinated pAKT translocates to perinuclear regions, where it is either released into the cytoplasm, imported into the nucleus or coupled with proteasomal degradation. IGF-1 signaling specifically stimulates NEDD4-1-mediated ubiquitination of pAKT, without altering total AKT ubiquitination. A cancer-derived plasma membrane-philic mutant AKT(E17K) is more effectively ubiquitinated by NEDD4-1 and more efficiently trafficked into the nucleus compared with wild type AKT. This study reveals a novel mechanism by which a specific E3 ligase is required for ubiquitin-dependent control of pAKT dynamics in a ligand-specific manner.