Activation of the serine/threonine protein kinase Akt/PKB is a multi-step process involving membrane recruitment, phosphorylation, and membrane detachment. To investigate this process in the cellular context, we employed a live-cell fluorescence imaging approach to examine conformational changes of Akt and its membrane association. A fluorescence resonance energy transfer-based reporter of Akt action (ReAktion) reveals a conformational change that is critically dependent on the existence of a phosphorylatable threonine 308 in the activation loop, because mutations to either aspartate or alanine abolished the change. Furthermore, a mutant carrying a phosphorylation mimic at this position showed diminished membrane association, suggesting that this phosphorylation plays an important role of promoting the dissociation of activated Akt from the membrane. In addition, the membrane-associating pleckstrin homology domain was found to associate with the catalytic domain when Thr308 is phosphorylated, suggesting such an interdomain interaction as a mechanism by which phosphorylation within the catalytic domain can affect membrane association. These studies uncover new regulatory roles of this critical phosphorylation event of Akt for ensuring its proper activation and function.