Murine NIH3T3 cells were used to study the effect of ribozymes on H-ras-mediated transformation. Parental 3T3 cells were transfected with the activated H-ras gene. H-ras-transformed cells had altered morphology and increased colony formation in soft agar in contrast to untransfected 3T3 cells. A hammerhead ribozyme (site-specific ribonuclease) designed to cleave codon 12 (GUC) of the activated H-ras RNA was expressed in transformed cells. 3T3 clones expressing the ras ribozyme displayed decreased expression of activated H-ras RNA. The ras ribozyme reversed the transformed phenotype to resemble that of untransfected 3T3 cells. Furthermore, 3T3 cells containing the ras ribozyme were shown to suppress transformation when they were subsequently transfected with activated H-ras. Insertion of a mutant ribozyme largely devoid of cleaving capacity into H-ras-transformed cells resulted in smaller reductions in H-ras gene expression and colony formation in soft agar when compared with the ras ribozyme. Finally, the ras ribozyme alone did not perturb normal 3T3 cell growth. This study suggests the possible utility of anti-oncogene ribozymes as suppressors of tumor cell growth as well as inhibitors of cellular transformation.