Pancreatic islet homogenates contain a Mg 2+-requiring phospholipid methyltransferase activity, the activity of which was doubled by calcium ( K 0.5 < 5 μm). Other divalent metal ions stimulated the activity from 11 to 35%, but zinc and strontium were inhibitory. Cyclic AMP had no effect on the enzyme activity and cyclic GMP inhibited it slightly. Calcium increased the V max of the enzyme without affecting its K m with respect to S-adenosylmethionine (6 μ m). Chlorpromazine, trifluoperazine, and dibucaine inhibited the calcium-stimulatable activity without affecting the activity in the absence of calcium. Phosphatidylserine stimulated, and arachidonic acid and palmitic acid inhibited, the basal enzyme activity. The methylated products were found to be primarily mono- and dimethylphosphatidylethanolamine (30%) and phosphatidylcholine (43%) and an, as yet unidentified, nonpolar lipid fraction (27%), as judged by thin-layer chromatography. In the presence of calcium, incorporation of methyl groups into phosphatidylcholine, mono-and dimethylphosphatidylethanolamine, and nonpolar lipids was increased by 131, 60, and 46%, respectively. Based on the localization of the enzyme activity in the insulin secretory granule fraction, it is proposed that phospholipid methylation plays a role in coupling the stimulus to the initial events in insulin secretion, leading to the exocytosis of insulin.