Abstract Mutational activation of the PI3K/AKT pathway is among the most common pro-oncogenic events in human cancers. The clinical utility of PI3K and AKT inhibitors has, however, been modest to date. Here, we used CRISPR-mediated gene editing to study the biological consequences of AKT1 E17K mutation by developing an AKT1 E17K–mutant isogenic system in a TP53-null background. AKT1 E17K expression under the control of its endogenous promoter enhanced cell growth and colony formation, but had a paradoxical inhibitory effect on cell migration and invasion. The mechanistic basis by which activated AKT1 inhibited cell migration and invasion was increased E-cadherin expression mediated by suppression of ZEB1 transcription via altered β-catenin subcellular localization. This phenotypic effect was AKT1-specific, as AKT2 activation had the opposite effect, a reduction in E-cadherin expression. Consistent with the opposing effects of AKT1 and AKT2 activation on E-cadherin expression, a pro-migratory effect of AKT1 activation was not observed in breast cancer cells with PTEN loss or expression of an activating PIK3CA mutation, alterations which induce the activation of both AKT isoforms. The results suggest that the use of AKT inhibitors in patients with breast cancer could paradoxically accelerate metastatic progression in some genetic contexts and may explain the frequent coselection for CDH1 mutations in AKT1-mutated breast tumors. Implications: AKT1 E17K mutation in breast cancer impairs migration/invasiveness via sequestration of β-catenin to the cell membrane leading to decreased ZEB1 transcription, resulting in increased E-cadherin expression and a reversal of epithelial–mesenchymal transition.