The enzymatic methylation of polypeptides on the guanidino group of internal arginine residues by S-adenosylmethionine:protein arginine N-methyltransferase (protein methylase I) yields NG-monomethylarginine, NG,NG-dimethylarginine and NG,NG-dimethylarginine. It has commonly been observed that these arginine residues are present in glycine-and-arginine rich motifs. To understand structural features which are essential for serving as the methyl acceptor for protein methylase I, we have investigated substrate capacities of several synthetic oligopeptides whose sequences are homologous and/or analogous to the methyl acceptor region of the naturally occurring arginine-methylated proteins. These studies have led to the following conclusions. (i) The preferred amino-acid sequence of methyl-accepting peptides was shown to be an arginine-containing peptide with glycine in both the N- and C-flanking positions. While a tetrapeptide with such a sequence (residues 106-109 of bovine myelin basic protein) exhibited almost negligible substrate activity, an overlapping hexapeptide was a moderate substrate. (ii) Substitution of the C-flanking glycine in GKGRGL (residues 104-109 of myelin basic protein) with histidine, phenylalanine, lysine or aspartic acid completely abolished the ability of these hexapeptides to serve as substrates. (iii) A heptapeptide with a repeated glycine-arginine motif (GRGRGRG) was an excellent substrate for the enzyme. (iv) A cyclic octapeptide (CGKGRGLC), which was formed by cyclization of GKGRGL by introduction of disulfide bridge to cross-link N- and C-terminus of the hexapeptide, was an even better substrate than the hexapeptide. (v) Upon HPLC amino-acid analysis, all enzymatically methyl-14C-labeled oligopeptides were found to yield predominantly NG-monomethylarginine with a minor fraction of NG,NG-dimethylarginine in certain peptide samples. However, no NG,NG-dimethylarginine formation was detectable. (vi) The recombinant hnRNP protein A1 (residues 1-320) is known to be methylated at arginine-194 by nuclear-protein/histone protein methylase I (Rajpurohit et al. (1994) J. Biol. Chem. 269, 1079-1082). However, the hexapeptide (SSSQRG) which corresponds to residues 189-194 of protein A1 containing the methylatable arginine residue was relatively inert as a substrate. Furthermore, the N-terminal fragment of protein A1 (residues 1-196) generated by controlled trypsin digestion was also completely inactive as a substrate for the enzyme. These results indicate that the remainder of the A1 protein molecule plays an important though not yet understood role in enzymatic methylation of the arginine-194.