RasGRP, a guanyl nucleotide-releasing protein for the small guanosine triphosphatase Ras, was characterized. Besides the catalytic domain, RasGRP has an atypical pair of "EF hands" that bind calcium and a diacylglycerol (DAG)-binding domain. RasGRP activated Ras and caused transformation in fibroblasts. A DAG analog caused sustained activation of Ras-Erk signaling and changes in cell morphology. Signaling was associated with partitioning of RasGRP protein into the membrane fraction. Sustained ligand-induced signaling and membrane partitioning were absent when the DAG-binding domain was deleted. RasGRP is expressed in the nervous system, where it may couple changes in DAG and possibly calcium concentrations to Ras activation.