The DAF-2 insulin receptor-like signaling pathway controls metabolism, development, longevity, and stress response in C. elegans. Here we show that SGK-1, the C. elegans homolog of the serum- and glucocorticoid-inducible kinase SGK, acts in parallel to the AKT kinases to mediate DAF-2 signaling. Loss of sgk-1 results in defective egg-laying, extended generation time, increased stress resistance, and an extension of life span. SGK-1 forms a protein complex with the AKT kinases, and is activated by and strictly depends on PDK-1. All three kinases of this complex are able to directly phosphorylate DAF-16/FKHRL1, yet have different functions in DAF-2 signaling. Whereas AKT-1 and AKT-2 are more important for regulating dauer formation, SGK-1 is the crucial factor for the control of development, stress response, and longevity. Our data also suggest the existence of a second pathway from DAF-2 to DAF-16 that does not depend on AKT-1, AKT-2, and SGK-1.