We have studied the mechanism of A-769662, a new activator of AMP-activated protein kinase (AMPK). Unlike other pharmacological activators, it directly activates native rat AMPK by mimicking both effects of AMP, i.e. allosteric activation and inhibition of dephosphorylation. We found that it has no effect on the isolated alpha subunit kinase domain, with or without the associated autoinhibitory domain, or on interaction of glycogen with the beta subunit glycogen-binding domain. Although it mimics actions of AMP, it has no effect on binding of AMP to the isolated Bateman domains of the gamma subunit. The addition of A-769662 to mouse embryonic fibroblasts or primary mouse hepatocytes stimulates phosphorylation of acetyl-CoA carboxylase (ACC), effects that are completely abolished in AMPK-alpha1(-/-)alpha2(-/-) cells but not in TAK1(-/-) mouse embryonic fibroblasts. Phosphorylation of AMPK and ACC in response to A-769662 is also abolished in isolated mouse skeletal muscle lacking LKB1, a major upstream kinase for AMPK in this tissue. However, in HeLa cells, which lack LKB1 but express the alternate upstream kinase calmodulin-dependent protein kinase kinase-beta, phosphorylation of AMPK and ACC in response to A-769662 still occurs. These results show that in intact cells, the effects of A-769662 are independent of the upstream kinase utilized. We propose that this direct and specific AMPK activator will be a valuable experimental tool to understand the physiological roles of AMPK.