The Raf-1 protein kinase participates in transduction of mitogenic signals, but its mechanisms of activation are incompletely understood. Treatment of human Raf-1 purified from insect Sf9 cells co-expressing c-H-Ras and Src(Y527F) (in which phenylalanine replaces tyrosine at residue 527) with either serine-threonine or tyrosine phosphatases resulted in enzymatic inactivation of Raf-1. Inactivation of purified Raf-1 was blocked by addition of either the 14-3-3 zeta protein or heat shock protein 90, Loading of plasma membranes from transformed cells with guanosine triphosphate (GTP) resulted in inactivation of endogenous or exogenous Raf-1; inactivation was blocked by inclusion of protein phosphatase inhibitors. These results suggest the existence of protein phosphatases in the cell membrane that are regulated by GTP and are responsible for Raf-1 inactivation.