Protein carboxyl methyltransferase and protein methylesterase activity was assayed in various cell fractions prepared from rat livers. Significant amounts of protein carboxyl methyltransferase were detected in the cytosol and nucleoplasm. The cellular concentration of this enzyme paralleled development, activity being highest in the liver from young animals. If methylation was inhibited at any point during the reaction with S-adenosylhomocysteine, protein methylesterase activity was evident by a rapid decrease in carboxyl-methylated proteins. Protein methylesterase activity could be assessed by measuring the amount of [3H]methanol present in reaction filtrates. After a 10-min lag, the rate of demethylation was equivalent to the rate of methylation. The turnover of methyl groups was primarily enzymatic, since little or no methanol was generated when adrenocorticotropic hormone was incubated with purified protein carboxyl methyltransferase. Assessment of protein methylesterase activity as a function of the amount of methanol in the reaction filtrates represents minimal values, since the resultant [3H]methanol was metabolized rapidly via an alcohol dehydrogenase and/or oxidase. The rapid turnover of the protein methyl esters makes it difficult to assess the endogenous methyl acceptor proteins. Protein methyl esters were not detectable in any significant amounts in hepatic cell fractions in vivo; however, the nuclei contained measurable amounts of carboxyl-methylated proteins in vitro. These proteins are firmly bound to DNA but are not an integral part of the nucleosome. Analysis of the proteins, after fractionation on hydroxylapatite and sodium dodecyl sulfate-acrylamide gel electrophoresis, revealed that several non-histone chromosomal proteins were carboxyl methylated. The approximate molecular weights of these proteins were 172K, 106K, 98K, 81K, 66K, 62K, 52K, and 38K.(ABSTRACT TRUNCATED AT 250 WORDS)