The Harvey murine sarcoma virus (Ha-MuSV) transforming gene, v-ras^H, encodes a 21,000 molecular weight protein (p21) that is closely related to the p21 proteins encoded by the cellular transforming genes of the ras gene family^1–8. The primary translation product (prop21), which is found in the cytosol, undergoes post-translational modification⁹ and the mature protein subsequently becomes associated with the inner surface of the plasma membrane and binds lipid tightly^10,11. The p21 proteins have the capacity to bind guanine nucleotides non-covalently in vitro^3,12. To assess the biological relevance of these biochemical features of the protein, we have now studied a series of deletion mutants located at or near the C-terminus of the viral p21 protein. Our tissue culture studies indicate that amino acids located at or near the C-terminus are required for cellular transformation, membrane association and lipid binding.