The non-steroidal anti-inflammatory drug sulindac is used in cancer prevention and therapy, but the molecular aspects of its anti-tumor effect remain unresolved. In vivo the prodrug sulindac, is converted into the metabolite sulindac sulfide. We found that sulindac sulfide strongly inhibits Ras induced malignant transformation and Ras/Raf dependent transactivation. Sulindac sulfide decreases the Ras induced activation of its main effector, the c-Raf-1 kinase. In vitro sulindac sulfide directly binds to the Ras gene product p21ras in a non-covalent manner. Moreover, we can show that sulindac sulfide inhibits the interaction of p21ras with the p21ras binding domain of the Raf protein. In addition, sulindac sulfide can impair the nucleotide exchange on p21ras by CDC25 as well as the acceleration of the p21ras GTPase reaction by p120GAP. Due to its action at the most critical site in Ras signaling we propose sulindac sulfide as a lead compound in the search for novel anti-cancer drugs which directly inhibit Ras mediated cell proliferation and malignant transformation.