Lack of IGF2 in mice results in diminished embryonic growth due to diminished cell proliferation. Here we show that mouse embryonic fibroblasts lacking the RNA-binding protein IMP1 (IGF2 mRNA-binding protein 1) have defective splicing and translation of IGF2 mRNAs, markedly reduced IGF2 polypeptide production, and diminished proliferation. The proliferation of the IMP1-null fibroblasts can be restored to wild-type levels by IGF2 in vitro or by re-expression of IMP1, which corrects the defects in IGF2 RNA splicing and translation. The ability of IMP1 to correct these defects is dependent on IMP1 phosphorylation at Ser181, which is catalyzed cotranslationally by mTOR complex 2 (mTORC2). Phosphorylation strongly enhances IMP1 binding to the IGF2-leader 3 5' untranslated region, which is absolutely required to enable IGF2-leader 3 mRNA translational initiation by internal ribosomal entry. These findings uncover a new mechanism by which mTOR regulates organismal growth by promoting IGF2 production in the mouse embryo through mTORC2-catalyzed cotranslational IMP1/IMP3 phosphorylation. Inasmuch as TORC2 is activated by association with ribosomes, the present results indicate that mTORC2-catalyzed cotranslational protein phosphorylation is a core function of this complex.