S. cerevisiae strains containing RAS2val19, a RAS2 gene with a missense mutation analogous to one that activates the transforming potential of mammalian ras genes, have growth and biochemical properties strikingly similar to yeast strains carrying IAC or bcy1. Yeast strains carrying the IAC mutation have elevated levels of adenylate cyclase activity. bcy1 is a mutation that suppresses the lethality in adenylate cyclase deficient yeast. Yeast strains deficient in RAS function exhibit properties similar to adenylate cyclase deficient yeast. bcy1 suppresses lethality in ras1- ras2- yeast. Compared to wild-type yeast strains, intracellular cyclic AMP levels are significantly elevated in RAS2val19 strains, significantly depressed in ras2- strains, and virtually undetectable in ras1- ras2- bcy1 strains. Membranes from ras1- ras2- bcy1 yeast lack the GTP-stimulated adenylate cyclase activity present in membranes from wild-type cells, and membranes from RAS2val19 yeast strains have elevated levels of an apparently GTP-independent adenylate cyclase activity. Mixing membranes from ras1- ras2- yeast with membranes from adenylate cyclase deficient yeast reconstitutes a GTP-dependent adenylate cyclase.