Constitutive activation or overactivation of Ras signaling pathways contributes to epithelial tumorigenesis in several ways, one of which is cytoplasmic mislocalization of the cyclin-dependent kinase inhibitor p27Kip1 (p27). We previously showed that such an effect can be mediated by activation of the Ral-GEF pathway by oncogenic N-Ras. However, the mechanism(s) leading to p27 cytoplasmic accumulation downstream of activated Ral remained unknown. Here, we report a dual regulation of p27 cellular localization by Ral downstream pathways, based on opposing effects via the Ral effectors RalBP1 and phospholipase D1 (PLD1). Because RalA and RalB are equally effective in mislocalizing both murine and human p27, we focus on RalA and murine p27, which lacks the Thr-157 phosphorylation site of human p27. In experiments based on specific RalA and p27 mutants, complemented with short hairpin RNA-mediated knockdown of Ral downstream signaling components, we show that activation of RalBP1 induces cytoplasmic accumulation of p27 and that this event requires p27 Ser-10 phosphorylation by protein kinase B/Akt. Of note, activation of PLD1 counteracts this effect in a Ser-10-independent manner. The physiological relevance of the modulation of p27 localization by Ral is demonstrated by the ability of Ral-mediated activation of the RalBP1 pathway to abrogate transforming growth factor-β-mediated growth arrest in epithelial cells.