A cDNA clone encoding a novel, widely expressed protein (called growth factor receptor-bound protein 2 or GRB2) containing one src homology 2 (SH2) domain and two SH3 domains was isolated. Immunoblotting experiments indicate that GRB2 associates with tyrosine-phosphorylated epidermal growth factor receptors (EGFRs) and platelet-derived growth factor receptors (PDGFRs) via its SH2 domain. Interestingly, GRB2 exhibits striking structural and functional homology to the C. elegans protein sem-5. It has been shown that sem-5 and two other genes called let-23 (EGFR like) and let-60 (ras like) lie along the same signal transduction pathway controlling C. elegans vulval induction. To examine whether GRB2 is also a component of ras signaling in mammalian cells, microinjection studies were performed. While injection of GRB2 or H-ras proteins alone into quiescent rat fibroblasts did not have mitogenic effect, microinjection of GRB2 together with H-ras protein stimulated DNA synthesis. These results suggest that GRB2/sem-5 plays a crucial role in a highly conserved mechanism for growth factor control of ras signaling.