Protein prenylation refers to a type of lipid modification in which either a 15-carbon farnesyl or 20-carbon geranylgeranyl isoprenoid is linked via a thioether bond to specific cysteine residues of proteins. The majority of prenylated proteins belong to a group termed "CaaX proteins" that are defined by a specific C-terminal motif that directs their modification by this process. The ménage of CaaX-type prenylated proteins encompasses a wide variety of molecules that are found primarily at the cytoplasmic face of cellular membranes. These include nuclear lamins, Ras and a multitude of GTP-binding proteins (G proteins), several protein kinases and phosphatases, as well as other important proteins. A tremendous number of cellular signaling processes and regulatory events are under the control of CaaX prenyl proteins. While the attached isoprenoid lipids, in general, support the membrane association of the modified proteins, some proteins also clearly participate directly in protein-protein interactions. This chapter will emphasize 1) the biochemistry of the two enzymes termed farnesyltransferase and geranylgeranyltransferase type I, responsible for CaaX protein prenylation, and 2) biological roles for these modifications. Throughout, we will attempt to highlight the significance of prenylation in specific cellular events. The critical importance of this class of lipid modifications is attested to by the emergence of farnesyltransferase as a target for the development of anti-cancer therapeutics.