Ras and Rho GTPases are prominent participants in malignant transformation. They possess an essential prenyl group (farnesyl or geranylgeranyl) that endows them with membrane-tethering ability and functional specificity. Accumulating evidence suggests that prenyl groups are involved primarily in lipid-protein interactions, and recent experiments point to prenyl-binding hydrophobic pockets in proteins regulating Ras and Rho in normal cells and cancer cells. This review presents the evidence for such prenyl-binding domains as significant players in the control of Ras-like GTPases, and the emerging concept of prenyl-binding domains as potential targets for Ras inhibitors and anti-cancer drugs.