InCandida albicans, a fungal pathogen, the small G-protein Ras1 regulates many important behaviors including white-opaque switching, biofilm formation, and the induction and maintenance of hyphal growth. Like other Ras proteins, Ras1 is activated upon guanine triphosphate binding, and its activity is further modulated by post-translational lipid modifications. Here, we report that the levels of membrane-associated, full-length Ras1 were higher in hyphae than in yeast, and that yeast contained a shorter, soluble Ras1 species that resulted from cleavage. Deletion of the putative cleavage site led to more rapid induction of hyphal growth and delayed hypha-to-yeast transitions. The cleaved Ras1 species was less able to activate its effector, adenylate cyclase (Cyr1), unless tethered to the membrane by a heterologous membrane-targeting domain. Ras1 cleavage was repressed by cAMP-signalling, indicating the presence of a positive feedback loop in which Cyr1 and cAMP influence Ras1. TheC. albicansquorum sensing molecule farnesol, which inhibits Cyr1 and represses filamentation, caused an increase in the fraction of Ras1 in the cleaved form, particularly in nascent yeast formed from hyphae. This newly recognized mode of Ras regulation may controlC. albicansRas1 activity in important ways.