We study the effects of active galactic nuclei (AGN) feedback on the formation and evolution of galaxies by using a combination of a cosmological N-body simulation of the concordance Lambda cold dark matter (Lambda CDM) paradigm and a semi-analytic model of galaxy formation. This model is an improved version of the one described by Cora (2006), which now considers the growth of black holes (BHs) as driven by (i) gas accretion during merger-driven starbursts and mergers with other BHs, (ii) accretion during starbursts triggered by disc instabilities and (iii) accretion of gas cooled from quasi-hydrostatic hot gas haloes. It is assumed that feedback from AGN operates in the last case. The model has been calibrated in order to reproduce observational correlations between BH mass and mass, velocity dispersion and absolute magnitudes of the galaxy bulge. AGN feedback has a strong impact on reducing or even suppressing gas cooling, an effect that becomes important at lower redshifts. This phenomenon helps to reproduce the observed galaxy luminosity function (LF) in the optical and near-infrared bands at z = 0, and the cosmic star formation rate and stellar mass functions over a wide redshift range (0 less than or similar to z less than or similar to 5). It also allows us to have a population of massive galaxies already in place at z greater than or similar to 1, which are mostly early-type and have older and redder stellar populations than lower mass galaxies, reproducing the observed bimodality in the galaxy colour distribution, and the morphological fractions. The evolution of the optical QSO LF is also reproduced, provided that the presence of a significant fraction of obscured QSOs is assumed. We explore the effects of AGN feedback during starbursts finding that, in order to obtain a good agreement with observations, these need to be strong enough to expel the reheated gas away from the galaxy halo. We also test new, recent prescriptions for dynamical friction time-scales, and find that they produce an earlier formation of elliptical galaxies, and a larger amount of disc instabilities, which compensate the change in the merger frequency such that the properties of z = 0 galaxies remain almost unaffected.