3Y1 rat fibroblasts overexpressing the epidermal growth factor (EGF) receptor (EGFR cells) become transformed when treated with EGF. A common response to oncogenic and mitogenic stimuli is elevated phospholipase D (PLD) activity. RalA, a small GTPase that functions as a downstream effector molecule of Ras, exists in a complex with PLD1. In the EGFR cells, EGF induced a Ras-dependent activation of RalA. The activation of PLD by EGF in these cells was dependent upon both Ras and RalA. In contrast, EGF-induced activation of Erk1, Erk2, and Jun kinase was dependent on Ras but independent of RalA, indicating divergent pathways activated by EGF and mediated by Ras. The transformed phenotype induced by EGF in the EGFR cells was dependent upon both Ras and RalA. Importantly, overexpression of wild-type RalA or an activated RalA mutant increased PLD activity in the absence of EGF and transformed the EGFR cells. Although overexpression of PLD1 is generally toxic to cells, the EGFR cells not only tolerated PLD1 overexpression but also became transformed in the absence of EGF. These data demonstrate that either RalA or PLD1 can cooperate with EGF receptor to transform cells.