Post-translational processing of proteins such as the Ras GTPases, which contain a C-terminal CaaX motif (where C stands for cysteine, a for aliphatic and X is one of several amino acids), includes prenylation, proteolytic removal of the C-terminal tripeptide and carboxy-methylation of the isoprenyl-cysteine residue. In the present study, we report the presence of two distinct CaaX-proteolytic activities in membrane extracts from Caenorhabditis elegans, which are sensitive to EDTA and Tos-Phe-CH(2)Cl (tosylphenylalanylchloromethane; 'TPCK') respectively. A protein similar to the mammalian and yeast farnesylated-proteins converting enzyme-1 (FACE-1)/Ste24p CaaX metalloprotease, encoded by a hypothetical gene (CeFACE-1/C04F12.10) found in C. elegans chromosome I, probably accounts for the EDTA-sensitive activity. An orthologue of FACE-2/Rce1p, the enzyme responsible for the proteolytic maturation of Ras oncoproteins and other prenylated substrates, probably accounts for the Tos-Phe-CH(2)Cl-sensitive activity, even though the gene for FACE-2/Rce1 has not been previously identified in this model organism. We have identified a previously overlooked gene in C. elegans chromosome V, which codes for a 266-amino-acid protein (CeFACE-2) with 30% sequence identity to human FACE-2/Rce1. We show that both CeFACE-1 and CeFACE-2 have the ability to promote production of the farnesylated yeast pheromone a -factor in vivo and to cleave a farnesylated peptide in vitro. These results indicate that CeFACE-1 and CeFACE-2 are bona fide CaaX proteases and support the evolutionary conservation of this proteolytic system in eukaryotes.