To investigate the role of signaling by the small GTPase Ral, we have generated mice deficient for RalGDS, a guanine nucleotide exchange factor that activates Ral. We show that RalGDS is dispensable for mouse development but plays a substantial role in Ras-induced oncogenesis. Lack of RalGDS results in reduced tumor incidence, size, and progression to malignancy in multistage skin carcinogenesis, and reduced transformation by Ras in tissue culture. RalGDS does not appear to participate in the regulation of cell proliferation, but instead controls survival of transformed cells. Experiments performed in cells isolated from skin tumors suggest that RalGDS mediates cell survival through the activation of the JNK/SAPK pathway. These studies identify RalGDS as a key component in Ras-dependent carcinogenesis in vivo.