The effect of choline deficiency on the composition and biosynthesis of the major membrane phospholipids was examined in adrenal medullary cells maintained in suspension cultures. The amount and proportions of phosphatidylcholine (PC) and phosphatidylethanolamine (PE) in these cells were not affected by the removal of choline from the culture media. However, the rate of biosynthesis of choline at the phosphatide level by the stepwise methylation of PE increased twofold within 24 h after choline was removed from the culture media, while ethanolamine incorporation into PE was increased by 50%. In contrast, the rate of incorporation of labeled choline into PC, presumably via CDP-choline, was virtually identical in cells that had been preincubated in the presence or absence of 1 mM choline. These results demonstrate that cultured cells of neural origin are capable of compensating for lack of exogenous choline by forming choline at the phosphatide level through the sequential methylation of PE. The hypolipidemic drug, DH-990, when added to the culture media, inhibited conversion of phosphatidylmonomethylethanolamine (PME) to PC, but had no effect on the N-methylation of PE. This differential effect indicates that the initial N-methylation of PE is catalyzed by an enzyme that is distinguishable from the enzyme(s) catalyzing the conversion of PME to PC.