After isoprenylation, Ras and other CAAX proteins undergo endoproteolytic processing by Rce1 and methylation of the isoprenylcysteine by Icmt (isoprenylcysteine carboxyl methyltransferase). We reported previously that Rce1-deficient mice died during late gestation or soon after birth. We hypothesized that Icmt deficiency might cause a milder phenotype, in part because of reports suggesting the existence of more than one activity for methylating isoprenylated proteins. To address this hypothesis and also to address the issue of other methyltransferase activities, we generated Icmtdeficient mice. Contrary to our expectation, Icmt deficiency caused a more severe phenotype than Rce1 deficiency, with virtually all of the knockout embryos (Icmt؊/؊) dying by mid-gestation. An analysis of chimeric mice produced from Icmt؊/؊ embryonic stem cells showed that the Icmt؊/؊ cells retained the capacity to contribute to some tissues (e.g. skeletal muscle) but not to others (e.g. brain). Lysates from Icmt؊/؊ embryos lacked the ability to methylate either recombinant K-Ras or small molecule substrates (e.g. N-acetyl-S-geranylgeranyl-L-cysteine). In addition, Icmt؊/؊ cells lacked the ability to methylate Rab proteins. Thus, Icmt appears to be the only enzyme participating in the carboxyl methylation of isoprenylated proteins.After isoprenylation, Ras and other proteins that terminate with a CAAX 1 sequence undergo two additional C-terminal modifications (1). First, the last three amino acids of the protein (i.e. the -AAX) are released by an endoprotease associated with the endoplasmic reticulum (1-3). Second, the carboxyl group of the newly exposed isoprenylcysteine is methylated (4, 5). These post-isoprenylation processing steps may help target CAAX proteins to membrane surfaces within cells (1).The endoprotease and methyltransferase steps have attracted interest because they offer a potential means for modulating the activity of CAAX proteins, many of which participate in cell signaling (1). Several groups have hypothesized that inhibiting the endoprotease or the methyltransferase might retard the growth of tumors caused by mutation-activated Ras proteins (1, 2, 6, 7). At this point, however, testing such hypotheses appears to be a few years away. No specific high affinity inhibitors suitable for animal testing have been developed, either for the endoprotease or for the methyltransferase. Just as importantly, neither the spectrum of substrates nor the physiologic importance of the two processing steps has been explored fully. This is particularly the case for the methyltransferase.To define the physiologic relevance of the post-isoprenylation processing steps, our laboratory generated and characterized mice lacking the endoprotease Rce1 (8). Membranes from Rce1-deficient embryos and cells were completely unable to carry out the endoproteolytic processing of Ras and a host of other CAAX proteins. Surprisingly, the consequences of knocking out Rce1 in the mouse were relatively mild. Although most of the Rce1 knockout mice died bef...