Products of ras genes are synthesized as precursors in the cytosol and transported to the plasma membrane by a process which involves posttraslational modification by fatty acid. In this paper, we present evidence for the occurrence in the cytosol of an intermediate modification of ras proteins prior to the fatty acid acylation. The modification is detected by a slight shift in the mobility of the protein on SDS polyacrylamide gel. The fatty acid acylation does not contribute to this mobility shift. This modification is affected by the dprl mutation which has recently been shown to affect the processing of yeast RAS proteins. To further characterize the nature of the modification event, we have cloned DPR1 gene from the DNA of Saccharomyces cerevisiae. The gene is actively transcribed in yeast cells producing mRNA of approximately 1.6 kb. Genes related to the DRP1 appear to be present in a distantly related yeast, Schizosaccharomyces pombe as well as in guinea pig and human cells.