The ras protooncogene is involved in regulation of cell growth. Mutations that activate the protein result in uncontrolled cell growth. Ras undergoes a series of posttranslational processing events, the first of which, farnesylation, is crucial for the function of the protein. Inhibitors of the farnesyltransferase enzyme are therefore potential candidates for the development of anticancer drugs. Tetrapeptides have been reported to be good inhibitors of this enzyme in vitro. We have synthesized analogs of the tetrapeptide Cys-Val-Phe-Met by replacement of the amino-terminal amide bonds. One inhibitor, B581, is permeable to the cell membrane. In the cell, it inhibits processing of two farnesylated proteins, H-ras and lamin A, but it does not inhibit processing of a geranylgeranylated protein, Rap 1A. Microinjection of B581 into frog oocytes inhibits maturation induced by activated, farnesylated H-ras but not maturation induced by activated, geranylgeranylated H-ras or by progesterone. These results demonstrate that this peptide mimic inhibits farnesylation selectively in the cell. The inhibition of farnesylation results in inhibition of H-ras function.