Nonpolar methylated products comprise approximately 50% of the radioactive material extractable into chloroform/methanol after incubation of human red cell membranes with S-[methyl-3H]adenosylmethionine. One of these nonpolar products is fatty acid methyl ester. The enzyme which synthesizes fatty acid methyl ester had an apparent Km for S-adenosylmethionine of about 0.6 micro M and a Vmax of about 0.6 pmol/mg protein per 30 min. Half-maximal activity was achieved upon addition of about 20 micro M sodium oleate. Of the fatty acids tested, sodium oleate increased activity most effectively (6-fold) and arachidonic acid was ineffective. Evidence indicated that fatty acid methylation takes place on the cytoplasmic side of the plasma membrane. The reaction was demonstrable in intact cells incubated with [methyl-3H]methionine, and increased upon addition of sodium oleate. Incubation of intact cells with melittin, a potent membrane phospholipase A2 activator from bee venom, increased fatty acid methylation several-fold. Fatty acid methylation appears to be one of the consequences of phospholipase A2 action in plasma membranes.