Incubation of cytosolic extracts of bovine brain with S-adenosyl[methyl-3H]methionine results in the predominant [3H]methyl esterification of a 36-kDa polypeptide. This reaction appears to be distinct from any of the three known types of protein carboxyl methylation reactions previously established. We show here that the methylated 36-kDa polypeptide is a component of a cytosolic protein with a native molecular mass estimated at 178 kDa by gel filtration chromatography. The methyl group is not stable on the protein and is lost as [3H]methanol with a half-life of about 180 min at pH 7.0, 37 degrees C. The methyltransferase responsible for this reaction is a cytosolic protein with a native molecular mass of about 40 kDa that is readily separated from the well described protein-L-isoaspartate (D-aspartate) O-methyltransferase (EC 2.1.1.77). The methyl ester linkage is cleaved by carboxypeptidase Y, suggesting that the 36-kDa polypeptide is methylated on its C-terminal carboxyl group. Extensive digestion of gel-purified 3H-methylated 36-kDa polypeptide with trypsin and leucine aminopeptidase results in a radioactive product that co-chromatographs with authentic L-leucine methyl ester in reverse phase high performance liquid chromatography (HPLC), thin layer chromatography, thin layer electrophoresis, and high resolution-sulfonated polystyrene cation-exchange chromatography. Additionally, the o-phthalaldehyde/beta-mercaptoethanol-derived isoindole derivative of the 3H digestion product co-migrates on HPLC with the corresponding isoindole for L-leucine methyl ester. We demonstrate that a similar methylation system is present in yeast Saccharomyces cerevisiae but not in the bacterium Escherichia coli. These results provide evidence for a new type of reversible posttranslational modification reaction that may function to modulate the activities of its methyl-accepting substrates.