Activating point mutations in the Ras oncogene occur in a large number of human tumors, especially of epithelial origin. In thyroid follicular cells, ectopic expression of oncogenic H-Ras results in growth factor-independent proliferation, loss of differentiation and tumor formation in nude mice. In fibroblasts concomitant activation of the MAP kinase cascade and the small GTPase Rac-1 leads to full malignant transformation. We have tested the effects of these key downstream mediators of Ras in thyroid epithelial cells, by stably expressing either a constitutively active form of MEK-1 (MEKΔN3/S218E/S222D), a constitutively active form of Rac-1 (Val12-Rac), or both. While the activation of one molecule or the other results in a weak phenotype, concomitant activation of both MEK-1 and Rac-1 in thyroid cells leads to growth factor-independent proliferation, morphological transformation and anchorage-independent growth. However, in contrast to Ras-transformed thyroid cells, the ones expressing the constitutively active forms of MEK-1 and Rac-1 maintain their differentiate phenotype and fail to form tumors when injected into nude mice. Thus, in thyroid epithelial cells, concomitant activation of MEK-1 and Rac-1 can reproduce only a subset of the Ras-induced effects and is not sufficient to cause full malignant transformation. Significantly, Ras-mediated increased proliferation and loss of differentiation can be dissociated in these cells.