The site-selective modification of proteins with a functional group is an important biochemical technique, but covalent attachment of a desired group to a chosen site is complicated by the reactivity of other amino acid side chains, often resulting in undesired side reactions. One potential solution to this problem involves exploiting the activity of protein-modifying enzymes that recognize a defined protein sequence. Protein farnesyltransferase (FTase) covalently attaches an isoprenoid moiety to a cysteine unit in the context of a short C-terminal sequence that can be easily grafted onto recombinant proteins. Here we describe the synthesis of four phosphoisoprenoids functionalized with biotin, azide, or diene groups. These phosphoisoprenoids bound to FTase with affinities comparable to that of the native substrate. With the exception of the biotin-functionalized analogue, all the phosphoisoprenoids generated could be transferred to peptide and protein substrates by FTase. Unlike proteins modified with farnesyl moieties, Ypt7 prenylated with (2E,6E)-8-(azidoacetamido)-3,7-dimethylocta-2,6-dienyl groups did not oligomerize and showed no detectable increase in hydrophobicity. To assess the suitability of the functionalized isoprenoids for protein modifications they were further derivatized, both by Diels-Alder cycloaddition with 6-maleimidohexanoic acid and by Staudinger ligation with a phosphine. We demonstrate that the Staudinger ligation proceeds more rapidly and is more efficient than the Diels-Alder cycloaddition. Our data validate the use of FTase as a protein-modification tool for biochemical and biotechnological applications.