It is widely thought that the biological outcomes of Raf-1 activation are solely attributable to the activation of the MEK/extracellular signal-regulated kinase (ERK) pathway. However, an increasing number of reports suggest that some Raf-1 functions are independent of this pathway. In this report we show that mutation of the amino-terminal 14-3-3 binding site of Raf-1 uncouples its ability to activate the MEK/ERK pathway from the induction of cell transformation and differentiation. In NIH 3T3 fibroblasts and COS-1 cells, mutation of serine 259 resulted in Raf-1 proteins which activated the MEK/ERK pathway as efficiently as v-Raf. However, in contrast to v-Raf, RafS259 mutants failed to transform. They induced morphological alterations and slightly accelerated proliferation in NIH 3T3 fibroblasts but were not tumorigenic in mice and behaved like wild-type Raf-1 in transformation assays measuring loss of contact inhibition or anchorage-independent growth. Curiously, the RafS259 mutants inhibited focus induction by an activated MEK allele, suggesting that they can hyperactivate negative-feedback pathways. In primary cultures of postmitotic chicken neuroretina cells, RafS259A was able to sustain proliferation to a level comparable to that sustained by the membrane-targeted transforming Raf-1 protein, RafCAAX. In contrast, RafS259A was only a poor inducer of neurite formation in PC12 cells in comparison to RafCAAX. Thus, RafS259 mutants genetically separate MEK/ERK activation from the ability of Raf-1 to induce transformation and differentiation. The results further suggest that RafS259 mutants inhibit signaling pathways required to promote these biological processes.