Previous studies of premature chain termination mutants and in frame deletion mutants of the p21 ras transforming protein encoded by the transforming gene of Harvey murine sarcoma virus (Ha-MuSV) have suggested that the C terminus is required for cellular transformation, lipid binding, and membrane localization. We have now further characterized the post-translational processing of these mutants and have also studied two C-terminal v-rasH point mutants: one encodes serine in place of cysteine-186, the other threonine for valine-187. The Thr-187 mutant was transformation-competent, and its p21 protein was processed normally, as was the p21 encoded by a transformation-competent deletion mutant from which amino acids 166-175 had been deleted. The Ser-186 mutant was defective for transformation. The p21s encoded by the Ser-186 mutant and by the previously described transformation-defective mutants did not undergo the posttranslational processing common to biologically active ras proteins: their electrophoretic migration rate did not change, they remained in the cytosol, and they failed to bind lipid. Since the cell-encoded ras proteins also contain this cysteine, we conclude that this amino acid residue is required for all ras proteins.