We report the identification, purification, and characterization of a farnesyl:protein transferase that transfers the farnesyl moiety from farnesyl pyrophosphate to a cysteine in p21ras proteins. The enzyme was purified approximately 60,000-fold from rat brain cytosol through use of a chromatography step based on the enzyme's ability to bind to a hexapeptide containing the consensus sequence (Cys-AAX) for farnesylation. The purified enzyme migrated on gel filtration chromatography with an apparent molecular weight of 70,000-100,000. High resolution SDS-polyacrylamide gels showed two closely spaced approximately 50 kd protein bands in the final preparation. The enzyme was inhibited competitively by peptides as short as 4 residues that contained the Cys-AAX motif. These peptides acted as alternative substrates that competed with p21H-ras for farnesylation. Effective peptides included the COOH-terminal sequences of all known p21ras proteins as well as those of lamin A and B.