Many key regulatory proteins, including members of the Ras family of GTPases, are modified at their C terminus by a process termed prenylation. This processing is initiated by the addition of an isoprenoid lipid, and the proteins are further modified by a proteolytic event and methylation of the C-terminal prenylcysteine. Although the biological consequences of prenylation have been characterized extensively, the contributions of prenylcysteine methylation to the functions of the modified proteins are not well understood. This reaction is catalyzed by the enzyme isoprenylcysteine carboxyl methyltransferase (Icmt). Recent genetic disruption studies have provided strong evidence that blocking Icmt activity has profound consequences on oncogenic transformation. Here, we report the identification of a selective small-molecule inhibitor of Icmt, 2-[5-(3-methylphenyl)-1-octyl-1H-indol-3-yl]acetamide (cysmethynil). Cysmethynil treatment results in inhibition of cell growth in an Icmt-dependent fashion, demonstrating mechanism-based activity of the compound. Treatment of cancer cells with cysmethynil results in mislocalization of Ras and impaired epidermal growth factor signaling. In a human colon cancer cell line, cysmethynil treatment blocks anchorage-independent growth, and this effect is reversed by overexpression of Icmt. These findings provide a compelling rationale for development of Icmt inhibitors as another approach to anticancer drug development.