The RAS proteins undergo farnesylation of a carboxyl-terminal cysteine (the "C" of the carboxyl-terminal CaaX motif). After farnesylation, the 3 amino acids downstream from the farnesyl cysteine (the -aaX of the CaaX motif) are released by RAS-converting enzyme 1 (RCE1). We previously showed that inactivation of Rce1 in mouse fibroblasts mislocalizes RAS proteins away from the plasma membrane and inhibits RAS transformation. Therefore, we hypothesized that the inactivation of Rce1 might inhibit RAS transformation in vivo. To test this hypothesis, we used Cre/loxP recombination techniques to simultaneously inactivate Rce1 and activate a latent oncogenic K-RAS allele in hematopoietic cells in mice. Normally, activation of the oncogenic K-RAS allele in hematopoietic cells leads to rapidly progressing and lethal myeloproliferative disease. Contrary to our hypothesis, the inactivation of Rce1 actually increased peripheral leukocytosis, increased the release of immature hematopoietic cells into the circulation and the infiltration of cells into liver and spleen, and caused mice to die more rapidly. Moreover, in the absence of Rce1, splenocytes and bone marrow cells expressing oncogenic K-RAS yielded more and larger colonies when grown in methylcellulose. We conclude that the inactivation of Rce1 worsens the myeloproliferative disease caused by oncogenic K-RAS.