Transformation by oncogenic Ras requires the function of the Rho family GTPases. We find that Ras-transformed cells have elevated levels of RhoA-GTP, which functions to inhibit the expression of the cell cycle inhibitor p21/Waf1. These high levels of Rho-GTP are not a direct consequence of Ras signalling but are selected for in response to sustained ERK–MAP kinase signalling. While the elevated levels of Rho-GTP control the level of p21/Waf, they no longer regulate the formation of actin stress fibres in transformed cells. We show that the sustained ERK–MAP kinase signalling resulting from transformation by oncogenic Ras down-regulates ROCK1 and Rho-kinase, two Rho effectors required for actin stress fibre formation. The repression of Rho-dependent stress fibre formation by ERK–MAP kinase signalling contributes to the increased motility of Ras-transformed fibroblasts. Overexpression of the ROCK target LIM kinase restores actin stress fibres and inhibits the motility of Ras-transformed fibroblasts. We propose a model in which Ras and Rho signalling pathways cross-talk to promote signalling pathways favouring transformation.