A cDNA library was constructed in lambda gt10 from T-15 cells, a transformed mouse fibroblast line. The transforming N-ras sequence was recovered and subsequently used as a substrate for ribozyme cleavage. The design of the ribozyme was based on that of the hammerhead structure of the satellite tobacco ringspot autolytic processing sequence. Specificity to the N-ras substrate was conferred by 10 nucleotides homologous to the target site on the mRNA positioned on either side of the catalytic unit. The cleavage reaction was most efficient at higher temperatures but efficiency at lower temperatures was improved by the inclusion of urea in the reaction mixture. The ribozyme failed to cut an antisense ras sequence even at high temperature or in the presence of urea.