Ewing sarcoma family tumors (ESFT) are highly aggressive and highly metastatic tumors caused by a chromosomal fusion between the Ewing sarcoma protein (EWS) with the transcription factor FLI-1. However, expression of the EWS/FLI-1 chimeric oncogene by itself is insufficient for carcinogenesis, suggesting that additional events are required. Here, we report the identification of the Akt substrate PRAS40 as an EWS target gene. EWS negatively regulates PRAS40 expression by binding the 3' untranslated region in PRAS40 mRNA. ESFT cell proliferation was suppressed by treatment with an Akt inhibitor, and ESFT cell proliferation and metastatic growth were suppressed by siRNA-mediated PRAS40 knockdown. Furthermore, PRAS40 knockdown was sufficient to reverse an increased cell proliferation elicited by EWS knockdown. In support of a pathologic role for PRAS40 elevation in EFST, we documented inverse protein levels of EWS and PRAS40 in ESFT cells. Together, our findings suggest that PRAS40 promotes the development of ESFT and might therefore represent a novel therapeutic target in this aggressive disease.