Muscarinic receptors activate Ras through a pathway distinct from that mediated through translocation of the exchange factor mSos1 by receptor tyrosine kinases. Here we report that muscarinic receptors can activate another Ras exchange factor, CDC25Mm, or p140Ras-GRF (refs 5,6). In NIH-3T3 cells expressing subtype 1 human muscarinic receptors (hm1), the agonist carbachol selectively increased the specific activity and phosphorylation state of epitope-tagged Ras-GRF. This stimulation was reversed by protein phosphatase 1 (PP1), and prevented by transducin alpha-subunits. Carbachol treatment of neonatal rat brain explants increasd Ras exchange factor activity and the phosphorylation state of endogenous Ras-GRF. In COS-7 cells, cotransfection of hm1 or hm2 receptors with Ras-GRF conferred carbachol-dependent increases in exchange-factor activity, whereas cotransfection with G-protein beta gamma subunits caused a constitutive activation that was sensitive to PP1. These results demonstrate a G-protein-coupled mechanism for Ras activation, mediated by p140 Ras-GRF.