PHLPP1 belongs to a novel family of Ser/Thr protein phosphatases that serve as tumor suppressors by negatively regulating Akt signaling. Our recent studies have demonstrated that loss of PHLPP expression occurs at high frequency in colorectal cancer. In this study, we identified PHLPP1 as a proteolytic target of a β-TrCP-containing Skp-Cullin 1-F-box protein (SCF) complex (SCF^β-TrCP) E3 ubiquitin ligase in a phosphorylation-dependent manner. Overexpression of wild-type but not ΔF-box mutant β-TrCP leads to decreased expression and increased ubiquitination of PHLPP1, whereas knockdown of endogenous β-TrCP has the opposite effect. In addition, we show that the β-TrCP-mediated degradation requires phosphorylation of PHLPP1 by casein kinase I and glycogen synthase kinase 3β (GSK-3β), and activation of the phosphatidylinositol 3-kinase/Akt pathway suppresses the degradation of PHLPP1 by inhibiting the GSK-3β activity. Furthermore, expression of a degradation-deficient PHLPP1 mutant in colon cancer cells results in a more effective dephosphorylation of Akt and inhibition of cell growth. Taken together, our findings demonstrate a key role for β-TrCP in controlling the level of PHLPP1, and activation of Akt negatively regulates this degradation process.