Enzymatic step-wise methylation of membrane phosphatidylethanolamine (PE) to phosphatidyl-N-methylethanolamine (PME) and then phosphatidyl-choline (PC) has been known to alter membrane properties and responsiveness of cells for activation of receptors by chemical transmitters. Conversion of PE to PME and PME to PC in the presence of S-adenosyl-Lmethionine (SAM) are catalyzed by two phospholipid N-methyltransferases, PMT I and PMT II, of which PMT I is the rate limiting enzyme. Retina is a good neuronal model for chemical transmission. However, retina was not studied for PMT activity. Therefore, we studied the rat retina for PMT I activity. Methylation of PE in the rat retinal sonicates was assayed using 3H-SAM (2 ßM) at 37°C in Tris-glycylglycine buffer (50 mM, pH 8.0) and methylated phospholipids were extracted with chloroform/methanol/HCl (2/1/0.02, v/v) and separated by thin layer chromatography on Silica Gel G plates. Chromatograms were developed in a solvent system of propionic acid/n-propyl alcohol/chloroform/water (2/2/1/1, v/v). This study gave the following results: (a) the total methylated phospholipids were (M + SE, N=5) 19.90 + 4.03 fmol/mg protein/min; (b) the major methylated phospholipid was PME (4.21 + 0.68 fmol/mg protein/min; (c) the fatty acid methylesters formed by fatty acid carboxymethylase (FACM) which accumulated in the solvent front amounted to 18.82 + 2.84 fmol/mg protein/min. Both PMT I and FACM were inhibited by S-adenosyl-L-homocysteine (150, 1.2 -5 ßM). These observations indicate that rat retina contains both PMTs and FACM.