Suppression of tumor formation and restoration of normal growth of cells has been an insignia that the retinoblastoma gene (RB1) functions as a tumor suppressor gene. The tumor suppressive functions of RB are suggested to associate with regulation of cell cycle events or gene transcription. We have analysed here the interactions of RB and c-Ha-ras oncogene by gene transfection studies. Mouse fibroblasts stably expressing high levels human wild type (wt) pRB or mutant pRB were transfected with genomic or LTR promoter driven c-Ha-ras(Val-12) expression vectors. We find that expression of normal, but not mutant RB protein in the cells prevents c-Ha-ras oncogene mediated cellular transformation and colony formation in soft agar. Analysis of stable RB and genomic c-Ha-ras cell transfectants for expression of pRB and p21ras by immunoblotting indicates a strong correlation with the presence of high levels of RB protein and inhibition of ras-transformation. Moreover, during culturing the RB and genomic c-Ha-ras expressing clones a progressive transformation of phenotypically normal clones was observed which paralleled loss or decrease of RB expression and concomitant increase in p21ras production. These findings suggest a functional cross-talk between RB protein and p21ras, which balances the cell phenotype between normal and transformed states.