In order to establish infection, intra-macrophage parasite Leishmania donovani needs to inhibit host defense parameters like inflammatory cytokine production and apoptosis. In the present study, we demonstrate that the parasite achieves both by exploiting a single host regulator AKT for modulating its downstream transcription factors, β-catenin and FOXO-1. L. donovani-infected RAW264. 7 and bone marrow-derived macrophages (BMDM) treated with AKT inhibitor or dominant negative AKT constructs showed decreased anti-inflammatory cytokine production and increased host cell apoptosis resulting in reduced parasite survival. Infection-induced activated AKT triggered phosphorylation-mediated deactivation of its downstream target, GSK-3β. Inactivated GSK-3β, in turn, could no longer sequester cytosolic β-catenin, an anti-apoptotic transcriptional regulator, as evidenced from its nuclear translocation during infection. Constitutively active GSK-3β-transfected L. donovani-infected cells mimicked the effects of AKT inhibition and siRNA-mediated silencing of β-catenin led to disruption of mitochondrial potential along with increased caspase-3 activity and IL-12 production leading to decreased parasite survival. In addition to activating anti-apoptotic β-catenin, phospho-AKT inhibits activation of FOXO-1, a pro-apoptotic transcriptional regulator. Nuclear retention of FOXO-1, inhibited during infection, was reversed when infected cells were transfected with dominant negative AKT constructs. Overexpression of FOXO-1 in infected macrophages not only documented increased apoptosis but promoted enhanced TLR4 expression and NF-κB activity along with an increase in IL-1β and decrease in IL-10 secretion. In vivo administration of AKT inhibitor significantly decreased liver and spleen parasite burden and switched cytokine balance in favor of host. In contrast, GSK-3β inhibitor did not result in any significant change in infectivity parameters. Collectively our findings revealed that L. donovani triggered AKT activation to regulate GSK-3β/β-catenin/FOXO-1 axis, thus ensuring inhibition of both host cell apoptosis and immune response essential for its intra-macrophage survival.