Ras mutations are frequent in thyroid tumors, the most common endocrine malignancy. The ability of Ras to transform thyroid cells is thought to rely on its mitogenic activity. Unexpectedly, acute expression of activated Ras in normal rat thyroid cells induced a DNA damage response, followed by apoptosis. Notably, a subpopulation of cells evaded apoptosis and emerged with features of transformation, including the loss of epithelial morphology, dedifferentiation, and the acquisition of hormone- and anchorage-independent proliferation. Strikingly, the surviving cells showed marked chromosomal instability. Acutely, Ras stimulated replication stress as evidenced by the induction of ataxia telangiectasia mutated and Rad3-related protein kinase (ATR) activity (Chk1 phosphorylation) and of γH2A.X, a marker of DNA damage. Despite the activation of a checkpoint, cells continued through mitosis in the face of DNA damage, resulting in an increase in cells harboring micronuclei, an indication of defects in chromosome segregation and other forms of chromosome damage. Cells that survived exposure to Ras continued to exhibit replication stress (ATR activation) but no longer exhibited γH2A.X or full activation of p53. When rechallenged with Ras or DNA-damaging agents, the surviving cells were more resistant to apoptosis than parental cells. These data show that acute expression of activated Ras is sufficient to induce chromosomal instability in the absence of other signals, and suggest that Ras-induced chromosomal instability arises as a consequence of defects in the processing of DNA damage. Hence, abrogation of the DNA damage response may constitute a novel mechanism for Ras transformation. (Cancer Res 2006; 66(21): 10505-12)