The ras-related rap2 gene encodes a 21 kDa GTP-binding protein that exhibits many structural similarities with Ras proteins. In particular, it contains a C-terminal CAAX sequence (C, cysteine; A, aliphatic residue; X, any amino acid) which has been shown to direct the post-translational modifications responsible for membrane binding of Ras proteins and nuclear lamins. We have generated cell lines overexpressing the Rap2 protein as well as specific anti-Rap2 antibodies and show that the protein is tightly associated with cellular membranes. Similarly to Ras proteins, the Rap2 protein is synthesized as a soluble and hydrophilic precursor that is processed to the mature hydrophobic membrane-bound form. During its maturation, the Rap2 protein is modified by the attachment of both palmitate and polyisoprenoid groups, as is also the case for H- and N-Ras proteins. Subcellular fractionation by sucrose density centrifugation as well as indirect immunofluorescence experiments show that the Rap2 protein is localized in a low-density compartment that morphologically overlaps with the endoplasmic reticulum, whereas Ras proteins are associated with the plasma membrane. In spite of similar post-translational modifications by palmitoylation and polyisoprenylation, Ras and Rap2 proteins are thus located on distinct subcellular structures.