Glycine betaine (N,N,N-trimethylglycine) is an important osmoprotectant and is synthesized in response to abiotic stresses. Although almost all known biosynthetic pathways of betaine are two-step oxidation of choline, here we isolated two N-methyltransferase genes from a halotolerant cyanobacterium Aphanothece halophytica. One of gene products (ORF1) catalyzed the methylation reactions of glycine and sarcosine with S-adenosylmethionine acting as the methyl donor. The other one (ORF2) specifically catalyzed the methylation of dimethylglycine to betaine. Both enzymes are active as monomers. Betaine, a final product, did not show the feed back inhibition for the methyltransferases even in the presence of 2 m. A reaction product, S-adenosyl homocysteine, inhibited the methylation reactions with relatively low affinities. The co-expressing of two enzymes in Escherichia coli increased the betaine level and enhanced the growth rates. Immunoblot analysis revealed that the accumulation levels of both enzymes in A. halophytica cells increased with increasing the salinity. These results indicate that A. halophytica cells synthesize betaine from glycine by a three-step methylation. The changes of amino acids Arg-169 to Lys or Glu in ORF1 and Pro-171 to Gln and/or Met-172 to Arg in ORF2 significantly decreased V(max) and increased K(m) for methyl acceptors (glycine, sarcosine, and dimethylglycine) but modestly affected K(m) for S-adenosylmethionine, indicating the importance of these amino acids for the binding of methyl acceptors. Physiological and functional properties of methyltransferases were discussed.