Ral proteins (RalA and RalB) comprise a distinct family of Ras‐related GTPases (Feig and Emkey, 1993). Recently, Ral‐GDS, the exchange factor that activates Ral proteins, has been shown to bind specifically to the activated forms of RasH, R‐Ras and Rap1A, in the yeast two‐hybrid system. Here we demonstrate that although all three GTPases have the capacity to bind Ral‐GDS in mammalian cells, only RasH activates Ral‐GDS. Furthermore, although constitutively activated Ra1A does not induce oncogenic transformation on its own, its expression enhances the transforming activities of both RasH and Raf. Finally, a dominant inhibitory form of RalA suppresses the transforming activities of both RasH and Raf. These results demonstrate that activation of Ral‐GDS and thus its target, Ral, constitutes a distinct downstream signaling pathway from RasH that potentiates oncogenic transformation.