We have previously described a small molecule-directed protein dimerization strategy, using coumermycin to juxtapose Raf fusion proteins containing the coumermycin-binding domain GyrB. Oligomerization of cytoplasmically localized Raf-GyrB fusion proteins leads to an increase in the kinase activity of both Raf and its substrate Mek. Surprisingly, more distal targets, such as Erk1 and Erk2, are not activated using this approach. Here we report that coumermycin-induced oligomerization of a membrane-localized Raf-GyrB fusion protein potently activated Erk1 and Erk2, up-regulated Fos protein levels, and induced expression of many immediate-early response genes. Thus, both membrane localization and oligomerization of Raf-GyrB are required to target Raf signals to downstream effectors. The ability to activate the entire Rag signal transduction cascade conditionally, using coumermycin-induced oligomerization, should prove useful for dissecting Raf-mediated effects on gene expression and cellular differentiation.