We have identified a novel fungal metabolite that is an inhibitor of human farnesyl-protein transferase (FPTase) by randomly screening natural product extracts using a high-throughput biochemical assay. Clavaric acid [24, 25-dihydroxy-2-(3-hydroxy-3-methylglutaryl)lanostan-3-one] was isolated from Clavariadelphus truncatus; it specifically inhibits human FPTase (IC50 = 1.3 microM) and does not inhibit geranylgeranyl-protein transferase-I (GGPTase-I) or squalene synthase activity. It is competitive with respect to Ras and is a reversible inhibitor of FPTase. An alkaline hydrolysis product of clavaric acid, clavarinone [2,24,25-trihydroxylanostan-3-one], lacking the 3-hydroxy-3-methylglutaric acid side chain is less active as a FPTase inhibitor. Similarly, a methyl ester derivative of clavaric acid is also inactive. In Rat1 ras-transformed cells clavaric acid and lovastatin inhibited Ras processing without being overtly cytotoxic. Excess mevalonate reversed the effects of lovastatin but not of clavaric acid suggesting that the block on Ras processing by clavaric acid was due to inhibition of FPTase and not due to inhibition of HMG-CoA reductase. Despite these results, the possibility existed that clavaric acid inhibited Ras processing by directly inhibiting HMG-CoA reductase. To directly examine the effects of clavaric acid and clavarinone on HMG-CoA reductase, cholesterol synthesis was measured in HepG2 cells. No inhibition of HMG-CoA reductase was observed indicating that the inhibition of Ras processing by this class of compounds is due to inhibition of FPTase. To date, clavaric acid is the second reported nitrogen-free compound that competes with Ras to inhibit FPTase activity. A series of related compounds derived from computer-based similarity searches and subsequent rational chemical synthetic design provided compounds that exhibited a range of activity (0.04 --> 100 microM) against FPTase. Modest changes in the structures of these inhibitors dramatically change the inhibitory activity of these inhibitors.