We demonstrate the pathway for the biosynthesis of RASI and RAS2 gene products of Saccharomyces cerevisiae leading to their localization in membranes. The primary translation products of these genes are detected in a soluble fraction. Shortly after synthesis, these precursor molecules are converted to forms that migrate slightly faster than the precursor forms on a NaDodSO4/polyacrylamide gel.These processed proteins are further modified by fatty acid acylation, which is detected by [3H]palmitic acid labeling. The acylated derivatives are found exclusively in cell membranes, indicating the translocation of the RAS proteins from cytosol to membranes during maturation process. The attached fatty acids can be released by mild alkaline hydrolysis, suggesting that the linkage between the fatty acid and the protein is an ester bond. The site of the modification by fatty acid is presumably localized to the COOH-terminal portion of the RAS proteins. Fractionation of the membranes by sucrose gradient demonstrates that a majority of the fatty-acylated RAS proteins are localized in plasma membrane.The RAS] and RAS2 genes of Saccharomyces cerevisiae were first identified as homologues of mammalian ras genes and were assigned to chromosomes XV and XIV, respectively (1-3). Amino acid sequences predicted from the DNA sequences of cloned genes have demonstrated a high level of homology with other members of the ras protein family (1, 2, 4, 5). Genetic analyses have shown that haploid cells that lack one of the RAS genes grow normally; however, mutants that are defective in both genes are incapable ofvegetative growth (3, 6). Like their mammalian counterparts, the yeast RAS proteins have been shown to bind GTP and GDP as well as to function as GTPase (7-10). Recent studies have shown that the RAS proteins are involved in the regulatory mechanisms ofadenylate cyclase activity (11,12 (12).Compared with the biochemical functions, little is known about the structural properties of the RAS proteins and how these relate to protein function. Since, as described above, the action of the RAS proteins appears to take place in membranes, it is important to elucidate subcellular localization and biosynthetic pathway of the RAS proteins. It is also of interest to investigate whether any modifications occur on the RAS proteins and which form regulates adenylate cyclase in the membranes. Many membraneous proteins are known to undergo various modifications. In the case ofp21raS protein of Harvey murine sarcoma virus, which is localized at the inner surface of the plasma membrane, detection of a soluble precursor pro-p21, conversion of pro-p21 to p21, and phosphorylation of p21 have been reported (13-15). Furthermore, the p21ras protein is modified by fatty acid acylation (13-17), which appears to be important for the transforming activity of the protein (14, 15). However, it is unclear whether the fatty acylation is responsible for the conversion of pro-p21 to p21 or whether a modification distinct from the fatty acylation is taking pla...