There is a superfamily of ras p21/ras p21-like small GTP-binding proteins (G proteins). Small G proteins have GDP-bound inactive and GTP-bound active forms which are interconvertible by GDP/GTP exchange and GTPase reactions. The former and latter reactions are regulated by GDP/GTP exchange proteins (GEPs) and GTPase activating proteins (GAPs), respectively. We have isolated two types of GEP: one is a stimulatory type called GDP dissociation stimulator (GDS) and the other is an inhibitory type called GDP dissociation inhibitor (GDI). Among the GEPs thus far isolated, only smg GDS is active on Ki-ras p21. This GEP is also active on smg p21 and rho p21, but is inactive on Ha-ras p21. For the action of smg GDS, the post-translational processing of the C-terminal region of its substrate small G proteins is essential. Point-mutated Ki-ras p21 strongly transforms NIH/3T3 cells and markedly stimulates the c-fos promoter/enhancer in this cell line, whereas normal Ki-ras p21 is almost inactive in these activities. smg GDS induces the Ki-ras p21 activation which eventually leads to the transformation of NIH/3T3 cells and to the stimulation of the c-fos promoter/enhancer in this cell line. Thus, smg GDS plays an important role in regulating the activity of Ki-ras p21 as well as of other small G proteins.