Oncogene-induced cellular senescence is well documented, but little is known about how infinite cell proliferation induced by loss of tumor suppressor genes is antagonized by cellular functions. Rb heterozygous mice generate Rb-deficient C cell adenomas that progress to adenocarcinomas following biallelic loss of N-ras. Here, we demonstrate that pRb inactivation induces aberrant expression of farnesyl diphosphate synthase, many prenyltransferases, and their upstream regulators sterol regulatory element-binding proteins (SREBPs) in an E2F-dependent manner, leading to enhanced isoprenylation and activation of N-Ras. Consequently, elevated N-Ras activity induces DNA damage response and p130-dependent cellular senescence in Rb-deficient cells. Furthermore, Rb heterozygous mice additionally lacking any of Ink4a, Arf, or Suv39h1 generated C cell adenocarcinomas, suggesting that cellular senescence antagonizes Rb-deficient carcinogenesis.