LY294002 is a highly selective phosphatidylinositol 3-kinase (PI3K) inhibitor, with no inhibitory activities against EGF receptor kinase, MAP kinases, PKC, PI 4-kinase, S6 kinase and c-Src. Recent study also showed it inhibits of casein kinase II.

LY294002 inhibits cell proliferation of choroidal melanoma OCM-1 cells. In regulation of murine ES cell self-renewal, LY294002 led to a reduction in the ability of LIF to maintain self-renewal via regulated expression of dominant negative delta-p85. It can also enhance the generation of mouse induced pluripotent stem cells.