In PC12 cells, Ha-Ras modulates multiple effector proteins that induce neuronal differentiation. To regulate these pathways Ha-Ras must be located at the plasma membrane, a process normally requiring attachment of farnesyl and palmitate lipids to the C terminus. Ext61L, a constitutively activated and palmitoylated Ha-Ras that lacks a farnesyl group, induced neurites with more actin cytoskeletal changes and lamellipodia than were induced by farnesylated Ha-Ras61L. Ext61L-triggered neurite outgrowth was prevented easily by co-expressing inhibitory Rho, Cdc42, or p21-activated kinase but required increased amounts of inhibitory Rac. Compared with Ha-Ras61L, Ext61L caused 2-fold greater Rac GTP binding and phosphatidylinositol 3-kinase activity in membranes, a hyperactivation that explained the numerous lamellipodia and ineffectiveness of Rac(N17). In contrast, Ext61L activated B-Raf kinase and ERK phosphorylation more poorly than Ha-Ras61L. Thus, accentuated differentiation by Ext61L apparently results from heightened activation of one Ras effector (phosphatidylinositol 3-kinase) and suboptimal activation of another (B-Raf). This surprising unbalanced effector activation, without changes in the designated Ras effector domain, indicates the Ext61L C-terminal alternations are a new way to influence Ha-Ras-effector utilization and suggest a broader role of the lipidated C terminus in Ha-Ras biological functions.