The prenylated proteins represent a newly discovered class of post-translationally modified proteins. The known prenylated proteins include the oncogene product p21ras and other low molecular weight GTP-binding proteins, the nuclear lamins, and the gamma subunit of the heterotrimeric G proteins. The modification involves the covalent attachment of a 15-carbon (farnesyl) or 20-carbon (geranylgeranyl) isoprenoid moiety in a thioether linkage to carboxyl terminal cysteine. The nature of the attached substituent is dependent on specific sequence information in the carboxyl terminus of the protein. In addition, prenylation entrains other posttranslational modifications forming a reaction pathway. In this article, we review our current understanding of the biochemical reactions involved in prenylation and discuss the possible role of this modification in the control of cellular functions such as protein maturation and cell growth.