Activated versions of ras genes have been found in various types of malignant tumors. The normal versions of these genes are found in organisms as diverse as mammals and yeasts. Yeast cells that lack their functional ras genes, RASSC-1 and RASSC-2, are ordinarily nonviable. They have now been shown to remain viable if they carry a mammalian rasH gene. In addition, yeast-mammalian hybrid genes and a deletion mutant yeast RASSC-1 gene were shown to induce morphologic transformation of mouse NIH 3T3 cells when the genes had a point mutation analogous to one that increases the transforming activity of mammalian ras genes. The results establish the functional relevance of the yeast system to the genetics and biochemistry of cellular transformation induced by mammalian ras genes.