Prenylated proteins contain a covalently linked cholesterol intermedia
te near their carboxyl-termini. Maturation of most prenylated proteins
involves proteolytic removal of the last three amino acids. Two genes
in Saccharomyces cerevisiae, RCE1 and AFC1, were identified that appe
ar to be responsible for this processing, The Afc1 protein is a zinc p
rotease that participates in the processing of yeast a-factor mating p
heromone. The Reel protein contributes to the processing of both Ras p
rotein and a-factor. Deletion of both AFC1 and RCE1 resulted in the lo
ss of proteolytic processing of prenylated proteins. Disruption of RCE
1 led to defects in Ras localization and signaling and suppressed the
activated phenotype associated with the allele RAS2(val19).