Protein farnesyl transferase (FTase) catalyzes transfer of a 15-carbon farnesyl group from farnesyl diphosphate (FPP) to a conserved cysteine in the C-terminal Ca(1)a(2)X motif of a range of proteins, including the oncoprotein H-Ras ("C" refers to the cysteine, "a" to any aliphatic amino acid, and "X" to any amino acid) and the lipid chain interacts with, and forms part of the Ca(1)a(2)X peptide binding site. Previous studies have shown that H-Ras biological function is ablated when it is modified with lipids that are 3-5 orders of magnitude less hydrophobic than FPP. Here, we employed a library of anilinogeranyl diphosphate (AGPP) and phenoxygeranyl diphosphate (PGPP) derivatives with a range of polarities (log P (lipid alcohol) = 0.7-6.8, log P (farnesol) = 6.1) and shapes to examine whether FTase-catalyzed transfer to peptide is dependent on the hydrophobicity of the lipid. Analysis of steady-state transfer kinetics for analogues to dansyl-GCVLS peptide revealed that the efficiency of lipid transfer was highly dependent on both the shape and size, but was independent of the polarity of the analogue. These observations indicate that hydrophobic features of isoprenoids critical for their association with membranes and/or protein receptors are not required for efficient transfer to Ca(1)a(2)X peptides by FTase. Furthermore, the results of these studies indicate that the role played by the farnesyl lipid in the FTase mechanism is primarily structural. To explain these results we propose a model in which the FTase active site stabilizes a membrane interface-like environment.