Two protein prenyltransferase enzymes, farnesyltransferase (FTase) and geranylgeranyltransferase-I (GGTase-I), catalyze the covalent attachment of a farnesyl or geranylgeranyl lipid group to the cysteine of a CaaX sequence (cysteine [C], two aliphatic amino acids [aa], and any amino acid [X]. In vitro studies reported here confirm previous reports that CaaX proteins with a C-terminal serine are farnesylated by FTase and those with a C-terminal leucine are geranylgeranylated by GGTase-I. In addition, we found that FTase can farnesylate CaaX proteins with a C-terminal leucine and can transfer a geranylgeranyl group to some CaaX proteins. Genetic data indicate that FTase and GGTase-I have the same substrate preferences in vivo as in vitro and also show that each enzyme can prenylate some of the preferred substrates of the other enzyme in vivo. Specifically, the viability of yeast cells lacking FTase is due to prenylation of Ras proteins by GGTase-I. Although this GGTase-I dependent prenylation of Ras is sufficient for growth, it is not sufficient for mutationally activated Ras proteins to exert deleterious effects on growth. The dependence of the activated Ras phenotype on FTase can be bypassed by replacing the C-terminal serine with leucine. This altered form of Ras appears to be prenylated by both GGTase-I and FTase, since it produces an activated phenotype in a strain lacking either FTase or GGTase-I. Yeast cells can grow in the absence of GGTase-I as long as two essential substrates are overexpressed, but their growth is slow. Such strains are dependent on FTase for viability and are able to grow faster when FTase is overproduced, suggesting that FTase can prenylate the essential substrates of GGTase-I when they are overproduced.