The protein-carboxyl methylating system has been studied in adrenal medullary cells either using disrupted cell components or with intact cells. Whereas the enzyme protein-carboxyl methylase (PCM) is cytosolic, the majority of its substrates is on or within chromaffin granules. With intact granules, methylation of surface proteins results in solubilization of membrane proteins. 2. Membrane PCM substrates have been identified as two proteins with apparent molecular weights of 55,000 and 32,000. Among the substrates located inside the granules, the chromogranins are excellent substrates, while dopamine beta-hydroxylase is poorly methylated. 3. Under physiological conditions, stimulation of the splanchnic nerve results in an increase in adrenal medullary protein-methyl ester formation as well as in an augmented methanol production. With adrenal medullary cells in culture, carboxyl-methylated chromogranin A is detected in mature chromaffin granules between 3 and 6 hr after labeling. Methylated chromogranins are secreted concomitantly with catecholamines following cholinergic stimulation. 4. These data coupled with those of Chelsky et al. (J. Biol. Chem. 262:4303-4309, 1987) on lamin B suggest that PCM methylates residues other than D-aspartyl and L-isoaspartyl in proteins. They further suggest that methylation may occur on nascent peptide chains before they are injected into the rough endoplasmic reticulum.