Posttranslational processing of Ras proteins has attracted considerable interest as a potential target for anticancer drug discovery. Rce1 encodes an endoprotease that facilitates membrane targeting of Ras and other prenylated proteins by releasing the carboxyl-terminal 3 amino acids (ie, the -AAX of the CAAX motif). Homozygous Rce1 mutant embryos (Rce1(-/-)) die late in gestation. To characterize the role of Rce1 in hematopoiesis, we performed adoptive transfers and investigated cells from the recipients. Rce1(-/-) fetal liver cells rescued lethally irradiated recipients and manifested normal long-term repopulating potential in competitive repopulation assays. The recipients of Rce1(-/-) cells developed modest elevations in mature myeloid cells (neutrophils + monocytes), but remained well. Bone marrow cells from mice that received transplants of Rce1(-/-) activated extracellular signal-related kinase (ERK) normally in response to granulocyte-macrophage colony-stimulating factor. These data suggest that pharmacologic inhibitors of Rce1 will have minimal effects on normal hematopoietic cells.