Activated Ras but not Raf can transform RIE-1 and other epithelial cells, indicating the critical importance of Raf-independent effector function in Ras transformation of epithelial cells. To elucidate the nature of these Raf-independent activities, we utilized representational difference analysis to identify genes aberrantly expressed by Ras through Raf-independent mechanisms in RIE-1 cells. We identified a total of 22 genes, both known and novel, whose expression was either activated or abolished by Ras but not Raf. The genes up-regulated encode proteins involved in protein or DNA synthesis, regulation of protease activity, or ligand binding, whereas those genes down-regulated encode actin cytoskeletal-, extracellular matrix-, and gap junction-associated proteins, and transmembrane receptor- or cytokine-like proteins. These results suggest that a key function of Raf-independent signaling involves deregulation of gene expression. We further characterized transgelin as a gene whose expression was abolished by Ras. Transgelin was identified previously as a protein whose expression was lost in virally transformed cell lines. We show that this loss is regulated at the level of gene expression and that both Raf-dependent and Raf-independent pathways are required to cause Ras down-regulation of transgelin in RIE-1 cells, whereas Raf alone is sufficient to cause its loss in NIH 3T3 fibroblasts. We also found that Ras-dependent and Ras-independent mechanisms can cause the down-regulation of transgelin in human breast and colon carcinoma cells lines and patient-derived tumor samples. We conclude that loss of transgelin gene expression may be an important early event in tumor progression and a diagnostic marker for breast and colon cancer development.