PI3K lipid kinases phosphorylate PIP2 to PIP3 in the PI3K/Akt/mTOR pathway to regulate cellular processes. They are frequently mutated in cancer. Here we determine the PI3Kα activation mechanism at the atomic level. Unlike protein kinases where the substrate abuts the ATP, crystal structures indicate that in PI3Kα, the distance between the γ phosphate of the ATP and the PIP2 lipid substrate is over 6 Å, much too far for the phosphoryl transfer, raising the question of how catalysis is executed. PI3Kα has two subunits, the catalytic p110α and the regulatory p85α. Our simulations show that release of the autoinhibition exerted by the nSH2 domain of the p85α triggers significant conformational change in p110α, leading to the exposure of the kinase domain for membrane interaction. Structural rearrangement in the C-lobe of the kinase domain reduces the distance between the ATP γ-phosphate and the substrate, offering an explanation as to how phosphoryl transfer is executed. An alternative mechanism may involve ATP relocation. This mechanism not only explains how oncogenic mutations promote PI3Kα activation by facilitating nSH2 release, or nSH2-release-induced, allosteric motions; it also offers an innovative, PI3K isoform-specific drug discovery principle. Rather than competing with nanomolar range ATP in the ATP-binding pocket and contending with ATP pocket conservation and massive binding targets, this mechanism suggests blocking the PI3Kα sequence-specific cavity between the ATP-binding pocket and the substrate binding site. Targeting isoform-specific residues in the cavity may prevent PIP2 phosphorylation.