Posttranslational prenylation of proteins synthesized as soluble precursors enhances their hydrophobicity and enables them to bind biological membranes. These modifications consist in the attachment of a C15 farnesyl or a C20 geranylgeranyl moiety to the cysteine residue(s) of proteins bearing CAAX, CC or CXC C-terminal sequences (where C = cysteine, A = aliphatic residue and X = any amino-acid), such as proteins of the ras superfamily, gamma subunits of heterotrimetric G proteins, lamin B as well as yeast mating factor a. A farnesyl transferase (FTase) and two distinct geranylgeranyl transferases (GGTases I and II) have been recently identified. FTase and GGTase I modify proteins containing a C-terminal CAAX motif; such a sequence is necessary and sufficient for recognition by the enzymes. The nature of the fourth residue determines the nature of the modification: when X is a serine, a methionine or a phenylalanine, the protein is farnesylated, whereas the presence of a leucine residue results in the attachment of a geranylgeranyl group. Both these enzymes are alpha beta heterodimers; their purification, molecular cloning of their coding sequences as well as mutational studies in yeast have shown that they share a common alpha subunit, and that their beta subunits exhibit a significant level of sequence similarity. GGTase II modifies ras-related proteins exhibiting CC and CXC C-terminal sequences; the enzyme as well as its recognition motif are yet largely uncharacterized.