Point mutations that activate the Ki-ras proto-oncogene are present in about 50 percent of human colorectal tumors. To study the functional significance of these mutations, the activated Ki-ras genes in two human colon carcinoma cell lines, DLD-1 and HCT 116, were disrupted by homologous recombination. Compared with parental cells, cells disrupted at the activated Ki-ras gene were morphologically altered, lost the capacity for anchorage-independent growth, grew more slowly both in vitro and in nude mice, and showed reduced expression of c-myc. Thus, the activated Ki-ras gene plays a key role in colorectal tumorigenesis through altered cell differentiation and cell growth.