The yeast two-hybrid system was used to identify proteins that interact with Ras. The H-Ras protein was found to interact with a guanine nucleotide dissociation stimulator (GDS) that has been previously shown to regulate guanine nucleotide exchange on another member of the Ras protein family, Ral. The interaction is mediated by the C-terminal, noncatalytic segment of the RalGDS and can be detected both in vivo, using the two-hybrid system, and in vitro, with purified recombinant proteins. The interaction of the RalGDS C-terminal segment with Ras is specific, dependent on activation of Ras by GTP, and blocked by a mutation that affects Ras effector function. These characteristics are similar to those previously demonstrated for the interaction between Ras and its putative effector, Raf, suggesting that the RalGDS may also be a Ras effector. Consistent with this idea, the RalGDS was found to inhibit the binding of Raf to Ras.