The Fbw7 tumor suppressor gene encodes the substrate recognition subunit of the SCF ubiquitin ligase, which targets for degradation a range of oncogenic proteins in a phosphorylation-dependent manner. Substrate phosphorylation is thought to be the main mechanism that ensures timely destruction of Fbw7 substrates. We show here that PI3K dependent phosphorylation of Fbw7 stimulates its ability to ubiquitinate and degrade its substrates. Mutation of the phosphorylation site destabilizes Fbw7 and attenuates degradation of cyclin E and Myc leading to the enhanced expression of a subset of Myc target genes. We suggest that PI3K-dependent phosphorylation of Fbw7 controls the balance between turnover of Fbw7 and its substrates to fine-tune their activity.