Tumor cell lines derived from malignant schwannomas removed from patients with neurofibromatosis type 1 (NF1) have been examined for the level of expression of NF1 protein. All three NF1 lines examined expressed lower levels of NF1 protein than control cells, and the level in one line was barely detectable. The tumor lines expressed normal levels of p120GAP and p21ras. Although the p21ras proteins isolated from the tumor cells had normal (nonmutant) biochemical properties in vitro, they displayed elevated levels of bound GTP in vivo. The level of total cellular GAP-like activity was reduced in extracts from the tumor line that expresses very little NF1 protein. Introduction of the catalytic region of GAP into this line resulted in morphological reversion and lower in vivo GTP binding by endogenous p21ras. These data implicate NF1 protein as a tumor suppressor gene product that negatively regulates p21ras and define a "positive" growth role for ras activity in NF1 malignancies.