The role of guanine nucleotides in ras p21 function was determined by using the ability of p21 protein to induce maturation of Xenopus oocytes as a quantitative assay for biological activity. Two oncogenic mutant human N-ras p21 proteins, Asp12 and Val12, actively induced maturation, whereas normal Gly12 p21 was relatively inactive in this assay. Both mutant proteins were found to be associated with guanosine triphosphate (GTP) in vivo. In contrast, Gly12 p21 was predominantly guanosine diphosphate (GDP)-bound because of a dramatic stimulation of Gly12 p21-associated guanosine triphosphatase (GTPase) activity. A cytoplasmic protein was shown to be responsible for this increase in activity. This protein stimulated GTP hydrolysis by purified Gly12 p21 more than 200-fold in vitro, but had no effect on Asp12 or Val12 mutants. A similar factor could be detected in extracts from mammalian cells. It thus appears that, in Xenopus oocytes, this protein maintains normal p21 in a biologically inactive, GDP-bound state through its effect on GTPase activity. Furthermore, it appears that the major effect of position 12 mutations is to prevent this protein from stimulating p21 GTPase activity, thereby allowing these mutants to remain in the active GTP-bound state.