Serum- and glucocorticoid-inducible kinase 3 (SGK3) mediates a variety of cellular processes including membrane transport, cell proliferation, and survival, and it has been implicated in Akt-independent signaling downstream of oncogenic PIK3CA mutations (activating mutations in the α catalytic subunit of PI3K) in human cancers. However, the regulation of SGK3 is poorly understood. Here we report that SGK3 stability and kinase activation are regulated by the Hsp90-Cdc37 chaperone complex. Hsp90-Cdc37 associates with the kinase domain of SGK3 and acts in concert with a C-terminal hydrophobic motif of SGK3 to prevent Hsp70 association and ubiquitin ligase CHIP (C terminus of Hsc70-interacting protein)-mediated degradation. Phosphorylation of hydrophobic motif triggers release of Cdc37 and concomitant association of 3-phosphoinositide dependent kinase 1 (PDK1) to activate SGK3. Our study provides new insights into regulation of SGK3 stability and activation and the rationale for application of Hsp90 inhibitors in treating SGK3-dependent cancers.