Although the heterotrimeric Gi alpha subunit terminates in an apparent CXXX prenylation signal (CGLF), it is not modified by isoprenylation. To determine if the Gi alpha CXXX sequence can signal prenylation when placed at the carboxyl termini of normally prenylated proteins, we have characterized the processing and biological activity of chimeric oncogenic Ras proteins that terminate in the Gi alpha CXXX sequence (Ras/Gi alpha). Surprisingly, these chimeras were prenylated both in vivo and in vitro, demonstrated significant membrane association, exhibited transforming activity, and induced transcriptional transactivation from Ras-responsive elements. We then extended these studies to determine if, unlike the CC or CXC carboxyl-terminal sequences of other Rab proteins, the carboxyl-terminal CXXX sequences of the Ras-related Rab5 and Rab11 proteins represent conventional CXXX prenylation signals that can support Ras processing and transforming activity. Unexpectedly, these Ras/Rab chimeras were nonprenylated, were cytosolic, and lacked detectable transforming or transcriptional transactivation activity. Taken together, these results suggest that the context within which a CXXX sequence occurs may also critically control the modification of a protein by prenylation, and that the Rab5 and Rab11 carboxyl termini do not possess conventional CXXX sequences. Instead, their CCXX and CCXXX motifs may represent additional classes of protein prenylation signals.