A high-throughput RNA interference (RNAi) screen targeting 542 genes of the human kinome was used to discover regulators of RNAi. Here we report that the proto-oncogene Akt-3/PKBγ (Akt3) phosphorylates Argonaute 2 (Ago2) at S387, which downregulates cleavage and upregulates translational repression of endogenous microRNA (miRNA)-targeted messenger RNAs (mRNAs). We further demonstrate that Akt3 coimmunoprecipitates with Ago2 and phosphorylation of Ago2 at S387 facilitates its interaction with GW182 and localization to cytoplasmic processing bodies (P bodies), where miRNA-targeted mRNAs are thought to be stored and degraded. Therefore, Akt3-mediated phosphorylation of Ago2 is a molecular switch between target mRNA cleavage and translational repression activities of Ago2.