The oocyte nuclear antigen of the monoclonal antibody 32-5B6 of Xenopus laevis is subject to regulated nuclear translocation during embryogenesis. It is distributed in the cytoplasm during oocyte maturation, where it remains during cleavage and blastula stages, before it gradually reaccumulates in the nuclei during gastrulation. We have now identified this antigen to be the enzyme S-adenosylhomocysteine hydrolase (SAHH). SAHH is the only enzyme that cleaves S-adenosylhomocysteine, a reaction product and an inhibitor of all S-adenosylmethionine-dependent methylation reactions. We have compared the spatial and temporal patterns of nuclear localization of SAHH and of nuclear methyltransferase activities during embryogenesis and in tissue culture cells. Nuclear localization of Xenopus SAHH did not temporally correlate with DNA methylation. However, we found that SAHH nuclear localization coincides with high rates of mRNA synthesis, a subpopulation colocalizes with RNA polymerase II, and inhibitors of SAHH reduce both methylation and synthesis of poly(A)(+) RNA. We therefore propose that accumulation of SAHH in the nucleus may be required for efficient cap methylation in transcriptionally active cells. Mutation analysis revealed that the C terminus and the N terminus are both required for efficient nuclear translocation in tissue culture cells, indicating that more than one interacting domain contributes to nuclear accumulation of Xenopus SAHH.