Two ras genes, c-ras1 and c-ras2, were isolated from the yeast strain Saccharomyces cerevisiae. Transcriptional analysis of yeast ras genes in different culture conditions suggests that the inability of ras2- mutants to grow in nonfermentable carbon sources results from the regulation of ras1 expression. The amount of ras1 mRNA is significantly repressed in cultures grown on the nonfermentable carbon sources ethanol and acetate. As a result, low ras protein is expressed under these conditions in ras2- mutants. This explains the inability of ras2- cells to grow on nonfermentable carbon sources. An extragenic suppressor of ras2- (sra 6-15), which restores growth on ethanol or acetate, leads to an increase in the amount of ras1 mRNA when grown on nonfermentable carbon sources. The pattern of transcriptional regulation for ras1 is not shared by ras2 indicating a differential control of these homologous yeast genes at the level of gene expression. Three different promoters for transcription have been identified for ras2 mRNA. Ras2 protein is always synthesized. The ras2 gene is regulated at the level of transcription and not at the level of protein synthesis.