We studied the effects of transfection of the normal c-Ha-ras gene, rasGly-12, and its oncogenic mutant, rasVal-12, on expression of the alpha-fetoprotein (AFP) and albumin genes in a human hepatoma cell line, HuH-7. The mutant and, to a lesser extent, the normal ras gene caused reduction of the AFP mRNA but not the albumin mRNA level in transfected HuH-7 cells. Cotransfection experiments with a rasVal-12 expression plasmid and a chloramphenicol acetyltransferase reporter gene fused to AFP regulatory sequences showed that rasVal-12 suppressed the activity of enhancer and promoter regions containing A + T-rich sequences (AT motif). In contrast, rasVal-12 did not affect the promoter activity of the albumin and human hepatitis B virus pre-S1 genes even though these promoters contain homologous A + T-rich elements. ras transfection appeared to induce phosphorylation of nuclear proteins that interact with the AFP AT motif, since gel mobility analysis revealed the formation of slow-moving complexes which was reversed by phosphatase treatment. However, similar changes in complex formation were observed with the albumin and hepatitis B surface antigen pre-S1 promoters. Therefore, this effect alone cannot explain the specific down regulation of the AFP promoter and enhancer activity. ras-mediated suppression of the AFP gene may reflect the process of developmental gene regulation in which AFP gene transcription is controlled by a G-protein-linked signal transduction cascade triggered by external growth stimuli.