The crystallographic structure of acetyl-Cys-Val-Ile-selenoMet-COOH and alpha-hydroxyfarnesylphosphonic acid (alphaHFP) complexed with rat farnesyl protein transferase (FPT) (space group P61, a = b = 174. 13 A, c = 69.71 A, alpha = beta = 90 degrees, gamma = 120 degrees, Rfactor = 21.8%, Rfree = 29.2%, 2.5 A resolution) is reported. In the ternary complex, the bound substrates are within van der Waals contact of each other and the FPT enzyme. alphaHFP binds in an extended conformation in the active-site cavity where positively charged side chains and solvent molecules interact with the phosphate moiety and aromatic side chains pack adjacent to the isoprenoid chain. The backbone of the bound CaaX peptide adopts an extended conformation, and the side chains interact with both FPT and alphaHFP. The cysteine sulfur of the bound peptide coordinates the active-site zinc. Overall, peptide binding and recognition appear to be dominated by side-chain interactions. Comparison of the structures of the ternary complex and unliganded FPT [Park, H., Boduluri, S., Moomaw, J., Casey, P., and Beese, L. (1997) Science 275, 1800-1804] shows that major rearrangements of several active site side chains occur upon substrate binding.