The eukaryotic enzyme isoprenylcysteine carboxylmethyltransferase (ICMT) catalyzes the attachment of a methyl group onto the carboxylate of a lipid-modified cysteine residue at the C-terminus of its protein substrates. This is the final processing step for proteins that contain a C-terminal ‘CAAX' motif, including Ras. Because inhibition of ICMT blocks Ras-induced oncogenic transformation, ICMT is a target for cancer therapy. Human ICMT is predicted to have eight transmembrane helices and it has no discernable homology with soluble methyltransferases. A salient question in understanding the mechanism of this enzyme is how both its water-soluble substrate (S-adenosyl-L-methionine, AdoMet) and its lipophilic substrate (a prenylated cysteine residue) are recognized in the active site. A crystal structure of an integral membrane methyltransferase from a prokaryotic organism was recently determined. The prokaryotic enzyme, which contains five transmembrane helices, has sequence conservation with ICMT in the region that binds AdoMet but has limited conservation elsewhere. In order to identify regions of ICMT that are important for catalytic activity, we mutated roughly half of the residues in ICMT and we interpreted the results with regard to the available structure. The mutants with reduced activity can be classified into two groups. The first class contains residues that form the AdoMet binding site and are conserved with the prokaryotic enzyme. For the second class of inactivating mutants, which is more numerous, there is high sequence conservation among eukaryotic ICMT homologs, but no discernable sequence conservation with the prokaryotic enzyme. This second class may contain residues involved in recognizing the prenylated cysteine substrate in eukaryotes. Our results indicate that the structure of the prokaryotic enzyme is informative for understanding the AdoMet binding site of ICMT and they point to differences between these two enzymes in other respects.