Hsp90 plays an essential role in maintaining stability and activity of its clients, including oncogenic signaling proteins that regulate key signal transduction nodes. Hsp90 inhibitors interfere with diverse signaling pathways by destabilizing and attenuating activity of such proteins, and thus they exhibit antitumor activity. However, Hsp90 inhibition has recently been reported to activate Akt and Erk and potentiate Akt activation induced by insulin-like growth factor 1 and insulin, raising the concern that clinical use of Hsp90 inhibitors might promote tumor progression under certain circumstances. Here, we show that the prototypical Hsp90 inhibitor geldanamycin induces Akt and Erk activation that is independent of PTEN status and is mediated by transient activation of Src kinase. Activated Src phosphorylates Cbl, which recruits the p85 subunit of phosphatidylinositol 3-kinase, resulting in phosphatidylinositol 3-kinase activation and eventually the activation of Akt and Erk. We show that geldanamycin rapidly disrupts Src association with Hsp90, suggesting that Src activation results directly from dissociation of the chaperone. These data suggest that, under certain circumstances, dual inhibition of Hsp90 and Src may be warranted.