Activation of receptor tyrosine kinases such as those for epidermal growth factor (EGF), platelet-derived growth factor, or nerve growth factor converts the inactive, GDP-bound form of Ras to the active, GTP-bound form, and a dominant negative mutant of Ras interferes with signalling from such receptors. The mechanisms by which receptor tyrosine kinases and Ras are coupled, however, are not well understood. Many cytoplasmic proteins regulated by such receptors contain Src-homology (SH) 2 and 3 domains, and the SH2- and SH3-containing protein Grb2, like its homologue from Caenorhabditis elegans, Sem-5, appears to play an important role in the control of Ras by receptor tyrosine kinases. Here we show that overexpression of Grb2 potentiates the EGF-induced activation of Ras and mitogen-activated protein kinase by enhancing the rate of guanine nucleotide exchange on Ras. Cellular Grb2 appears to form a complex with a guanine-nucleotide-exchange factor for Ras, which binds to the ligand-activated EGF receptor, allowing the tyrosine kinase to modulate Ras activity.