RhoB, a small GTP-binding protein, was shown previously to contain farnesyl (C-15) as well as geranylgeranyl (C-20) groups (Adamson, P., Marshall, C. J., Hall, A., and Tilbrook, P. A. (1992) J. Biol. Chem. 267, 20033-20038). The COOH-terminal sequence of the protein is CCKVL. According to current rules of prenylation, the COOH-terminal leucine should render the protein a substrate for CAAX geranylgeranyl transferase (GGTase-1), but not for CAAX farnesyltransferase (FTase). To determine the mechanism of farnesylation, we prepared recombinant RhoB and incubated it with recombinant preparations of either FTase or GGTase-1. RhoB was neither farnesylated nor geranylgeranylated efficiently by FTase, but it was farnesylated as well as geranylgeranylated by GGTase-1. The enzyme attached farnesyl more efficiently than geranylgeranyl to RhoB. Neither farnesylation nor geranylgeranylation required the cysteine at the fifth position from the COOH terminus. However, replacement of the cysteine at the fourth position abolished attachment of both prenyl groups. We conclude that the previously observed farnesylation of RhoB is attributable to the FTase activity of GGTase-1. These data, and other accumulating data, indicate that GGTase-1 is a highly unusual enzyme that efficiently transfers both farnesyl and geranylgeranyl groups and that the choice of prenyl group is dictated by the nature of the protein acceptor.