Methanosarcina thermophila, a nonmarine methanogenic archaebacterium, can grow in a range of saline concentrations. At less than 0.4 M NaCl, Ms. thermophila accumulated glutamate in response to increasing osmotic stress. At greater than 0.4 M NaCl, this organism synthesized a modified beta-amino acid that was identified as N epsilon-acetyl-beta-lysine by NMR spectroscopy and ion-exchange HPLC. This beta-amino acid derivative accumulated to high intracellular concentrations (up to 0.6 M) in Ms. thermophila and in another methanogen examined--Methanogenium cariaci, a marine species. The compound has features that are characteristic of a compatible solute: it is neutrally charged at physiological pH and it is highly soluble. When the cells were grown in the presence of exogenous glycine betaine, a physiological compatible solute, N epsilon-acetyl-beta-lysine synthesis was repressed and glycine betaine was accumulated. N epsilon-acetyl-beta-lysine was synthesized by species from three phylogenetic families when grown in high solute concentrations, suggesting that it may be ubiquitous among the methanogens. The ability to control the biosynthesis of N epsilon-acetyl-beta-lysine in response to extracellular solute concentration indicates that the methanogenic archaebacteria have a unique beta-amino acid biosynthetic pathway that is osmotically regulated.