Although it is well-established that modification of Ras by farnesol i
s a critical step for its membrane association and transforming activi
ty, the contribution of other C-terminal sequences and palmitate modif
ication to Ras localization and function remains unclear, We have char
acterized H-Ras mutant proteins with alterations in the palmitoylated
cysteines or in sequences flanking these residues, We found that non-p
almitoylated proteins were impaired not only in membrane association b
ut also in transforming activity, Mutations which drastically altered
residues adjacent to the palmitoylated cysteine did not abolish palmit
oylation, However, despite continued lipid modification the mutant pro
teins failed to bind to plasma membranes and instead accumulated on in
ternal membranes and, importantly, were not transforming, Addition of
an N-terminal myristoylation signal to these defective mutants, or to
proteins entirely lacking the C-terminal 25 residues restored both pla
sma membrane association and transforming activity, Thus, H-Ras does n
ot absolutely require prenylation or palmitoylation nor indeed its hyp
ervariable domain in order to interact with effecters that ultimately
cause transformation, However, in this native state, the C-terminus ap
pears to provide a combination of lipids and a previously unrecognized
signal for specific plasma membrane targeting that are essential for
the correct localization and biological function of H-Ras.