Ras proteins regulate cellular growth and differentiation, and are mutated in 30% of cancers. We have shown recently that Ras is activated on and transmits signals from the Golgi apparatus as well as the plasma membrane but the mechanism of compartmentalized signalling was not determined. Here we show that, in response to Src-dependent activation of phospholipase Cgamma1, the Ras guanine nucleotide exchange factor RasGRP1 translocated to the Golgi where it activated Ras. Whereas Ca(2+) positively regulated Ras on the Golgi apparatus through RasGRP1, the same second messenger negatively regulated Ras on the plasma membrane by means of the Ras GTPase-activating protein CAPRI. Ras activation after T-cell receptor stimulation in Jurkat cells, rich in RasGRP1, was limited to the Golgi apparatus through the action of CAPRI, demonstrating unambiguously a physiological role for Ras on Golgi. Activation of Ras on Golgi also induced differentiation of PC12 cells, transformed fibroblasts and mediated radioresistance. Thus, activation of Ras on Golgi has important biological consequences and proceeds through a pathway distinct from the one that activates Ras on the plasma membrane.