The atypical PKC-interacting protein, Par-4, inhibits cell survival and tumorigenesis in vitro, and its genetic inactivation in mice leads to reduced lifespan, enhanced benign tumour development and low-frequency carcinogenesis. Here, we demonstrate that Par-4 is highly expressed in normal lung but reduced in human lung cancer samples. We show, in a mouse model of lung tumours, that the lack of Par-4 dramatically enhances Ras-induced lung carcinoma formation in vivo, acting as a negative regulator of Akt activation. We also demonstrate in cell culture, in vivo, and in biochemical experiments that Akt regulation by Par-4 is mediated by PKCzeta, establishing a new paradigm for Akt regulation and, likely, for Ras-induced lung carcinogenesis, wherein Par-4 is a novel tumour suppressor.