We have previously demonstrated that H-ras(61L) retained transforming activity when lacking C-terminal lipid modifications, provided that plasma membrane localization was restored by an N-terminal transmembrane domain. Since several ras-activated pathways contribute to the transformed phenotype, we utilized a novel set of transmembrane domain-anchored H-ras derivatives to examine if lipids are required for activation of any specific signaling pathways. We demonstrate here that H-ras(61L)-induced activation of the Rafl MEK/MAPK pathway, including recruitment of Raf to the plasma membrane and activation of Raf and MAPK, does not require C-terminal processing of H-ras(61L). Biochemical fractionation experiments confirm the localization of TM-ras derivatives to the plasma membrane, as well as the ras-mediated recruitment of c-Raf-1. Changes in the actin cytoskeleton, controlled by H-ras(61L)-mediated activation of the Rac/ Rho pathway, as well as PI 3-kinase activation, can also occur in the absence of C-terminal lipid modifications. Finally, downstream events, such as the induction of the immediate-early gene c-fos or neurite outgrowth in PC12 cells, are stimulated by the expression of plasma membrane-anchored, nonlipidated H-ras(61L) These results demonstrate that H-ras can be functionally targeted to the plasma membrane using a transmembrane domain sequence and that several signal transduction pathways downstream of H-ras can be activated without the presence of normal lipid modifications. (C) 2000 Academic Press.