Recently, we found epigenetic silencing of the Ras effector genes NORE1B and/or RASSF1A in 97% of the hepatocellular carcinoma (HCC) investigated. This is strong evidence that the two genes are of major significance in hepatocarcinogenesis. Although RASSF1A serves as a tumor suppressor gene, the functions of NORE1B are largely unknown. Here, we studied the role of NORE1B for growth and transformation of cells. To understand the molecular mechanisms of action of the gene, we used the wild-type form and deletion mutants without the NH(2) terminus and CENTRAL domain, the Ras association (RA) domain, or the COOH-terminal SARAH-domain. Intact RA and SARAH-domains were found to be necessary for NORE1B (a) to increase the G(0)-G(1) fraction in hepatoma cells, (b) to suppress c-Myc/Ha-Ras-induced cell transformation, and (c) to interact closely with RASSF1A, as determined with fluorescence resonance energy transfer. In further studies, cell cycle delay by NORE1B was equally effective in hepatocyte cell lines with wild-type or mutant Ras suggesting that NORE1B does not interact with either Ras. In conclusion, NORE1B suppresses replication and transformation of cells as effectively as RASSF1A and thus is a putative tumor suppressor gene. NORE1B interacts physically with RASSF1A and functional loss of one of the interacting partners may lead to uncontrolled growth and transformation of hepatocytes. This may explain the frequent epigenetic silencing of NORE1B and/or RASSF1A in HCC.