While the Ras C-terminal CAAX sequence signals modification by a 15-carbon farnesyl isoprenoid, the majority of isoprenylated proteins in mammalian cells are modified instead by a 20-carbon geranylgeranyl moiety. To determine the structural and functional basis for modification of proteins by a specific isoprenoid group, we have generated chimeric Ras proteins containing C-terminal CAAX sequences (CVLL and CAIL) from geranylgeranyl-modified proteins and a chimeric Krev-1 protein containing the H-Ras C-terminal CAAX sequence (CVLS). Our results demonstrate that both oncogenic Ras transforming activity and Krev-1 antagonism of Ras transforming activity can be promoted by either farnesyl or geranylgeranyl modification. Similarly, geranylgeranyl-modified normal Ras [Ras(WT)CVLL], when overexpressed, exhibited the same level of transforming activity as the authentic farnesyl-modified normal Ras protein. Therefore, farnesyl and geranylgeranyl moieties are functionally interchangeable for these biological activities. In contrast, expression of moderate levels of geranylgeranyl-modified normal Ras inhibited the growth of untransformed NIH 3T3 cells. This growth inhibition was overcome by coexpression of the mutant protein with oncogenic Ras or Raf, but not with oncogenic Src or normal Ras. The similar growth-inhibiting activities of Ras(WT)CVLL and the previously described Ras(17N) dominant inhibitory mutant suggest that geranylgeranyl-modified normal Ras may exert its growth-inhibiting action by perturbing endogenous Ras function. These results suggest that normal Ras function may specifically require protein modification by a farnesyl, but not a geranylgeranyl, isoprenoid.