Rheb, a small GTPase, has emerged as a key molecular switch that directly regulates the activity of the mammalian target of rapamycin (mTOR). Similar to other members of the Ras superfamily, Rheb has a C-terminal CaaX box that is subject to farnesylation. This study reports that farnesylation is a key determinant of Rheb's subcellular localization and directs its association with the endomembrane. Timed imaging of live cells expressing EGFP-Rheb reveals that following brief association with the ER, Rheb localizes to highly ordered, distinct structures within the cytoplasm that display characteristics of Golgi membranes. Failure of Rheb to localize to the endomembrane impairs its ability to interact with mTOR and activate downstream targets. Consistent with the notion that the endomembrane may serve as a platform for the assembly of a functional Rheb/mTOR complex, treatment of cells with brefeldin A interferes with transmission of Rheb signals to p70S6K.