Forkhead transcription factors of the FOXO family are important downstream targets of protein kinase B (PKB)/Akt, a kinase shown to play a decisive role in cell proliferation and cell survival. Direct phosphorylation by PKB/Akt inhibits transcriptional activation by FOXO factors, causing their displacement from the nucleus into the cytoplasm. Work from recent years has shown that this family of transcription factors regulates the expression of a number of genes that are crucial for the proliferative status of a cell, as well as a number of genes involved in programmed cell death. As such, these transcription factors appear to play an essential role in many of the effects of PKB/Akt on cell proliferation and survival. Indeed, in cells of the hematopoietic system, mere activation of a FOXO factor is sufficient to activate a variety of proapoptotic genes and to trigger apoptosis. In contrast, in most other cell types, activation of FOXO blocks cellular proliferation and drives cells into a quiescent state. In such cell types, FOXO factors also provide the protective mechanisms that are required to adapt to the altered metabolic state of quiescent cells. Thus, as PKB/Akt signaling is switched off, FOXO factors take over to determine the fate of a cell, long-term survival in a quiescent state, or programmed cell death. This review summarizes our current understanding of the mechanisms by which PKB/Akt and FOXO factors regulate these decisions.