The Ras GTPase plays an essential role in many cellular signal transduction events. Activation of the mitogen activated protein (MAP) kinase is a primary consequence of Ras activation and plays a key role in mediating Ras signal transduction. A novel kinase, KSR, has recently been functionally isolated as a positive regulator of Ras signaling in Caenorhabditis elegans vulval induction and Drosophila photoreceptor differentiation. We have examined the effect of KSR on growth factor and Ras-induced MAP kinase signaling in mammalian cells. Surprisingly, we observed that KSR specifically blocks EGF and Ras-induced phosphorylation and activation of ternary complex factors (TCF), physiological substrates of MAP kinases, without affecting the activation of MAP kinase itself. A kinase-deficient mutant of KSR, KSR-RM, appears to function as a dominant interfering mutant which elevates phosphorylation of Elk-1, a member of the TCF family, and Elk-1-dependent transcription. The effect of KSR on Elk-1 was significantly decreased by inhibition of calcineurin, a putative Elk-1 phosphatase. These observations demonstrate that KSR is capable of uncoupling the MAP kinase activation from its target phosphorylation, and thus provide a novel mechanism for modulating the Ras–MAP kinase signaling pathway. This study provides the first evidence that signal output of MAP kinase cascades is subject to regulation at a level independent of MAP kinase activity.