Genes involved in the transduction of signals required for normal cell proliferation commonly appear to be subverted in the neoplastic process. One such group is the highly conserved family of ras genes, which have been detected as transforming genes in a wide variety of naturally occurring tumours. By analogy with other known G proteins, the p21 proteins encoded by ras genes may act as regulatory proteins in the transduction of signals that lead to DNA synthesis. A major pathway involved in the DNA synthesis induced by growth factors is mediated by phosphatidylinositol turnover: cleavage of phosphoinositides by phospholipase C produces 1,2-diacylglycerol, and inositol phosphates. The former acts as an essential cofactor for protein kinase C (ref. 4), and inositol-(1,4,5)-triphosphate mobilizes Ca2+ from non-mitochondrial intracellular stores. We demonstrate a reproducible increase in 1,2-diacylglycerol, in the absence of a detectable increase in inositol phosphates, in transformed cells containing Ha-ras oncogenes and with different membrane targeting signals for the ras p21 protein. These findings suggest that a source other than phosphoinositides exists for the generation of 1,2-diacylglycerol and that the Ha-ras oncogene specifically activates this novel pathway for 1,2-diacylglycerol production.