Alterations in the expression of ras oncogenes are characteristic of a wide variety of human neoplasms. Accumulating evidence has linked elevated ras expression with disease progression and with failure of tumors to respond to conventional therapies, including radiotherapy and certain chemotherapies. These observations led us to investigate the response of ras-transformed cells to the differentiation-inducer phenylacetate (PA). Using gene transfer models, we show that PA caused cytostasis in ras-transformed mesenchymal cells, associated with increased expression of 2',5'-oligoadenylate synthetase, an enzyme implicated in negative growth control. PA also induced phenotypic reversion characterized by loss of anchorage-independent growth, reduced invasiveness and increased expression of collagen alpha type I, a marker of cell differentiation. The anti-tumor activity of PA was observed in cases involving either Ha- or Ki-ras and was independent of the mode of oncogene activation. Interestingly, in contrast to their relative resistance to radiation and doxorubicin, ras-transformed cells were significantly more sensitive to PA than their parental cells. The profound changes in tumor cell and molecular biology were associated with reduced isoprenylation of the ras-encoded p21. Our results indicate that PA can suppress the growth of ras-transformed cells, resistant otherwise to free-radical based therapies, through interference with p21ras isoprenylation, critical to signal transduction and maintenance of the malignant phenotype.