Skeletal muscle atrophy is a debilitating response to fasting, disuse, cancer, and other systemic diseases. In atrophying muscles, the ubiquitin ligase, atrogin-1 (MAFbx), is dramatically induced, and this response is necessary for rapid atrophy. Here, we show that in cultured myotubes undergoing atrophy, the activity of the PI3K/AKT pathway decreases, leading to activation of Foxo transcription factors and atrogin-1 induction. IGF-1 treatment or AKT overexpression inhibits Foxo and atrogin-1 expression. Moreover, constitutively active Foxo3 acts on the atrogin-1 promoter to cause atrogin-1 transcription and dramatic atrophy of myotubes and muscle fibers. When Foxo activation is blocked by a dominant-negative construct in myotubes or by RNAi in mouse muscles in vivo, atrogin-1 induction during starvation and atrophy of myotubes induced by glucocorticoids are prevented. Thus, forkhead factor(s) play a critical role in the development of muscle atrophy, and inhibition of Foxo factors is an attractive approach to combat muscle wasting.