We isolated cDNA clones corresponding to the normal human Ki-ras2 gene and to the transforming allele of the Ki-ras2 gene present in the human colon carcinoma cell line SW480. These two cDNAs encode p21 proteins which differ only at the amino acid at position 12. The normal cDNA encodes a glycine at this position, and the transforming allele encodes a valine. Expression of these cDNAs indicates that this amino acid 12 alteration confers oncogenic activity on the mutated gene. Analysis of the relationship of the cDNAs and Kirsten sarcoma virus ras gene to a genomic clone allowed us to identify two alternative 3' coding exons for the Ki-ras2 gene, suggesting that the Ki-ras2 gene encodes two p21 proteins which differ at their carboxy termini. Our data also show that only one of the p21s is necessary to convert cells to a tumorigenic phenotype.