Long noncoding RNAs (lncRNAs) dysregulated in cancer potentially play oncogenic or tumor-suppressive roles. While the X inactivate-specific transcript (Xist) lncRNA is important for X-chromosome inactivation in female cells, very little is known about the role of Xist in human breast cancer in modulating cellular pathway(s). Here, we show that Xist expression is significantly reduced in breast tumor samples and cancer cell lines. Xist knockdown or overexpression resulted in increased or decreased levels, respectively, of AKT phosphorylation and cell viability. Further studies revealed an inverse correlation between Xist and phospho-AKT levels in breast cancer samples. Additionally, Xist knockdown-elicited increase of cell viability was attenuated by AKT inhibitor. These results suggest that Xist negatively regulates cell viability via inhibition of AKT activation. Interestingly, decreased Xist expression in breast cancer samples was associated with reduced levels of Jpx RNA, an lncRNA that positively regulates Xist promoter activity. Accordingly, Jpxknockdown enhanced AKT activation and cell viability. We also demonstrate that knockdown of Xist or SPEN, an intermediator protein to link Xist, SMRT co-repressor and HDAC3 complexes for X-chromosome inactivation, decreased expression of PHLPP1, a phosphatase to remove AKT phosphorylation, via increased HDAC3 recruitment to the PHLPP1 promoter, correlating with increased AKT phosphorylation. Our findings elucidate the tumor suppressor role of Xist in breast cancer and provide the molecular basis of Xistin downregulating AKT activation.