The insulin-like growth factor I (IGF-I) stimulates muscle satellite cell proliferation. Chakravarthy et al., (2000, J Biol Chem 275:35942–35952.) previously found that IGF-I-stimulated proliferation of primary satellite cells was associated with the activation of phosphatidylinositol 3′-kinase (PI3K)/Akt and the downregulation of a cell-cycle inhibitor p27Kip1. To understand mechanisms by which IGF-I signals the downregulation of p27Kip1 in rat skeletal satellite cells, the role of Forkhead transcription factor FoxO1 in transcriptional activity of p27Kip1 was examined. When primary rat satellite cells were transfected with a p27Kip1 promoter–reporter gene construct, IGF-I (100 ng/ml) inhibited specific p27Kip1 promoter activity. Addition of LY294002, an inhibitor of PI3K, reversed the IGF-I-mediated downregulation of p27Kip1 promoter activity. Co-transfection of wild type (WT) FoxO1 into satellite cells increased p27Kip1 promoter activity in the absence of IGF-I supplementation. Addition of IGF-I reversed the induction of p27Kip1 promoter activity by WT FoxO1. When a mutated FoxO1 (without Thr24, Ser256, and Ser316 Akt phosphorylation sites) was used, IGF-I was no longer able to reverse the FoxO1 induced stimulation of p27Kip1 promoter activity that had been seen when WT FoxO1 was present. When the satellite cells were treated with IGF-I, phosphorylation of Akt-Ser473 and FoxO1-Ser256 was increased. In addition, when the cells were pre-incubated with LY294002 before IGF-I stimulation, the phosphorylation of Akt-Ser473 and FoxO1-Ser256 was inhibited, implying that phosphorylation of Akt and FoxO1 was downstream of IGF-I-induced PI3K signaling. However, IGF-I did not induce phosphorylation of FoxO1 on residues Thr24 and Ser316. These results suggested that IGF-I induced the phosphorylation of Ser256 and inactivated FoxO1 thereby downregulating the activation of the p27Kip1 promoter. Thus, inactivation of FoxO1 by IGF-I plays a critical role in rat skeletal satellite cell proliferation through regulation of p27Kip1 expression. J. Cell. Physiol. 196: 523–531, 2003. © 2003 Wiley-Liss, Inc.