Low molecular mass GTP-binding proteins encoded by the mammalian rab genes are found in membranes of the Golgi complex and endosomes, suggesting that they play a role in the movement of exocytic and endocytic vesicles. The basis for the membrane association of these proteins has not been defined. Herein, we demonstrate that terminal cysteine residues in the rab1B, rab2, and rab5 proteins undergo thioether modification by isoprenyl groups when these proteins are translated in vitro in the presence of a radiolabeled isoprenoid precursor, [3H]mevalonate. Results of gel permeation chromatography of the radiolabeled hydrocarbons suggest that these proteins are modified specifically by isoprenyl groups of the 20-carbon diterpene class, rather than the 15-carbon farnesyl class known to be involved in modification of ras proteins. The rab1 and rab2 proteins lack the carboxyl-terminal amino acid motif common to all previously identified isoprenylated proteins, i.e. CXXX, where X is an unspecified amino acid. Analysis of altered translation products generated by site-directed mutagenesis indicates that modification of rab1B protein requires an intact carboxyl-terminal sequence consisting of GGCC. This represents a new amino acid motif for isoprenylation.