Tumor suppressor genes evolved as negative effectors of mitogen and nutrient signaling pathways, such that mutations in these genes can lead to pathological states of growth. Tuberous sclerosis (TSC) is a potentially devastating disease associated with mutations in two tumor suppressor genes, TSC1 and 2, that function as a complex to suppress signaling in the mTOR/S6K/4E-BP pathway. However, the inhibitory target of TSC1/2 and the mechanism by which it acts are unknown. Here we provide evidence that TSC1/2 is a GAP for the small GTPase Rheb and that insulin-mediated Rheb activation is PI3K dependent. Moreover, Rheb overexpression induces S6K1 phosphorylation and inhibits PKB phosphorylation, as do loss-of-function mutations in TSC1/2, but contrary to earlier reports Rheb has no effect on MAPK phosphorylation. Finally, coexpression of a human TSC2 cDNA harboring a disease-associated point mutation in the GAP domain, failed to stimulate Rheb GTPase activity or block Rheb activation of S6K1.