The GTP-binding p21 protein encoded by the ras-oncogene can be activated to cause malignant transformation of cells by substitution of a single amino acid at critical positions along the polypeptide chain. Substitution of any non-cyclic L-amino acid for Gly 12 in the normal protein results in a transforming protein. This substitution occurs in a hydrophobic sequence (residues 6-15) which is known to be involved in binding the phosphate moities of GTP (and GDP). We find, using conformational energy calculations, that the 6-15 segment of the normal protein (with Gly 12) adopts structures that contain a bend at residues 11 and 12 with the Gly in the D* conformation, not allowed energetically for L-amino acids. Substitution of non-cyclic L-amino acids for Gly 12 results in shifting this bend to residues 12 and 13. We show that many computed structures for the Gly 12-containing phosphate binding loop, segment 9-15, are superimposable on the corresponding segment of the recently determined X-ray crystallographic structure for residues 1-171 of the p21 protein. All such structures contain bends at residues 11 and 12 and most of these contain Gly 12 in the C* or D* conformational state. Other computed conformations for the 9-15 segment were superimposable on the structure of the corresponding 18-23 segment of EFtu, the bacterial chain elongation factor having structural similarities to the p21 protein in the phosphate-binding regions. This segment contains a Val residue where a Gly occurs in the p21 protein. As previously predicted, all of these superimposable conformations contain a bend at positions 12 and 13, not 11 and 12. If these structures that are superimposable on EFtu are introduced into the p21 protein structure, bad contacts occur between the sidechain of the residue (here Val) at position 12 and another phosphate binding loop region around position 61. These bad contacts between the two segments can be removed by changing the conformation of the 61 region in the p21 protein to the corresponding position of the homologous region in EFtu. In this new conformation, a large site becomes available for the binding of phosphate residues. In addition, such phenomena as autophosphorylation of the p21 protein by GTP can be explained with this new model structure for the activated protein which cannot be explained by the structure for the non-activated protein.