Protein farnesyltransferase (FTase) plays important roles in the growth and differentiation of eukaryotic cells. In this paper, we report the identification of the Schizosaccharomyces pombe gene cpp1(+) encoding the beta-subunit of FTase. The predicted amino acid sequence of the cpp1(+) gene product shares significant similarity with FTase beta-subunits from a variety of organisms. S. pombe FTase purified from E. coli exhibits high enzymatic activity toward the CAAX farnesylation motif substrates (where C represents cysteine, A represents aliphatic amino acid, and X is preferentially methionine, cysteine, serine, alanine, or glutamine) while showing little preference for CAAL geranylgeranylation motif substrates (where L represents leucine or phenylalanine). cpp1(+) is not essential for growth as shown by gene disruption; however, mutant cells exhibit rounded or irregular cell morphology. Expression of a geranylgeranylated mutant form, Ras1-CVIL, which can bypass farnesylation, rescues these morphological defects. We also identify a novel phenotype of cpp1(-) mutants, hypersensitivity to canavanine. This appears to be due to a 3-4-fold increase in the rate of arginine uptake as compared with wild-type cells. Expression of the geranylgeranylated mutant form of a novel farnesylated small GTPase, SpRheb, is able to suppress the elevated arginine uptake rate. These results demonstrate that protein farnesylation is critical for maintaining normal cell morphology through Ras1 and canavanine resistance through SpRheb.