TC21 is a member of the Ras superfamily of small GTP-binding proteins that, like Ras, has been implicated in the regulation of growth-stimulating pathways. We have previously identified the Raf/mitogen-activated protein kinase pathway as a direct TC21 effector pathway required for TC21-induced transformation (M. Rosário, H. F. Paterson, and C. J. Marshall, EMBO J. 18:1270-1279, 1999). In this study we have identified two further effector pathways for TC21, which contribute to TC21-stimulated transformation: the phosphatidylinositol 3' kinase (PI-3K) and Ral signaling pathways. Expression of constitutively active TC21 leads to the activation of Ral A and the PI-3K-dependent activation of Akt/protein kinase B. Strong activation of the PI-3K/Akt pathway is seen even with very low levels of TC21 expression, suggesting that TC21 may be a key small GTPase-regulator of PI-3K. TC21-induced alterations in cellular morphology in NIH 3T3 and PC12 cells are also PI-3K dependent. On the other hand, activation of the Ral pathway by TC21 is required for TC21-stimulated DNA synthesis but not transformed morphology. We show that inhibition of Ral signaling blocks DNA synthesis in human tumor cell lines containing activating mutations in TC21, demonstrating for the first time that this pathway is required for the proliferation of human tumor cells. Finally, we provide mechanisms for the activation of these pathways, namely, the direct in vivo interaction of TC21 with guanine nucleotide exchange factors for Ral, resulting in their translocation to the plasma membrane, and the direct interaction of TC21 with PI-3K. In both cases, the effector domain region of TC21 is required since point mutations in this region can interfere with activation of downstream signaling.