The murine p200 family protein, p204, modulates cell proliferation and tissue differentiation. Many of its activities are exerted in the nucleus. However, in cardiac myocytes, p204 accumulated in the cytoplasm. A yeast two-hybrid assay revealed a p204-cytoplasmic Ras protein interaction. This was confirmed (i) by coimmunoprecipitation of p204 with Ras in mouse heart extract and with endogenous or ectopic H-Ras and K-Ras in cell lysates as well as (ii) by binding of purified H-Ras-GTP to purified p204 in vitro. p204 inhibited (i) the cleavage of RasGTP to RasGDP by RasGAP; (ii) the binding to RasGTP of Raf-1, phosphatidylinositol 3-kinase, and Ral-GDS, effectors of Ras signaling; and (iii) activation by the Ras pathway of the phosphorylation and thus activation of downstream targets (e.g. MEK, Akt, and p38 MAPK). Oncogenic Ras expression triggered the phosphorylation and translocation of p204 from the nucleus to the cytoplasm. This is expected to increase the interaction between the two proteins. Translocation triggered by Ras oncoprotein was blocked by the LY294002 inhibitor of phosphatidylinositol 3-kinase. Ras did not promote phosphorylation or translocation to the cytoplasm of mutated p204 in which serine 179 was replaced by alanine. p204 overexpression inhibited the anchorage-independent proliferation of cells expressing Ras(Q61L) oncoprotein. Ras oncoprotein triggered in MEF3T3 cells the rearrangement of the actin cytoskeleton and the enhancement of cell migration through a membrane. Overexpression of p204 inhibited both. Ras oncoprotein or activated, wild-type Ras was described to increase Egr-1 transcription factor expression. We report that a sequence in the gene encoding p204 bound Egr-1, and Egr-1 activated p204 expression. Ras oncoprotein or activated wild-type Ras increased the expression in 3T3 cells of p204 together with that of Egr-1. Furthermore, the activation of expression of a single copy of K-ras oncogene in cultured murine embryonic cells induced the expression of a high level of p204 as well as its distribution between the nuclei and the cytoplasm. Thus, p204 may serve as a negative feedback inhibitor of Ras activity.