We used linker insertion-deletion mutagenesis to study the catalytic domain of the Harvey murine sarcoma virus v-rasH transforming protein, which is closely related to the cellular rasH protein. The mutants displayed a wide range of in vitro biological activity, from those that induced focal transformation of NIH 3T3 cells with approximately the same efficiency as the wild-type v-rasH gene to those that failed to induce any detectable morphologic changes. Correlation of transforming activity with the location of the mutations enabled us to identify three nonoverlapping segments within the catalytic domain that were dispensable for transformation and six other segments that were required for transformation. Segments that were necessary for guanosine nucleotide (GDP) binding corresponded to three of the segments that were essential for transformation; two of the three segments share strong sequence homology with other purine nucleotide-binding proteins. Loss of GDP binding was associated with apparent instability of the protein. Lesions in two of the three other required regions significantly reduced GDP binding, while small lesions in the last required region did not impair GDP binding or membrane localization. We speculate that this latter region interacts with the putative cellular target of ras. The results suggest that transforming ras proteins require membrane localization, guanosine nucleotide binding, and an additional undefined function that may represent interaction with their target.