The predominant pathway for the repair of O(6)-methylguanine in DNA is via the activity of an alkyltransferase protein that transfers the methyl group to a cysteine acceptor site on the protein itself. This review article describes recent studies on this alkyltransferase. The protein repairs not only methyl groups but also 2-chloroethyl-, benzyl- and pyridyloxobutyl-adducts. It acts on double-stranded DNA by flipping the O(6)-guanine adduct out of the DNA helix and into a binding pocket. The free base, O(6)-benzylguanine, is able to bind in this pocket and react with the cysteine, rendering it an effective inactivator of mammalian alkyltransferases. The alkylated form of the protein is rapidly degraded by the ubiquitin/proteasomal system. Some tumor cells do not express alkyltransferase despite having an intact gene. Methylation of key sites in CpG-rich islands in the promoter region are involved in this silencing and a change in the nuclear localization of an enhancer binding protein may also contribute. The alkyltransferase promoter contains Sp1, GRE and AP-1 sites and is slightly inducible by glucocorticoids and protein kinase C activators. There is a complex relationship between p53 and alkyltransferase expression with p53 mediating a rise in alkyltransferase in response to ionizing radiation but having no clear effect on basal levels. DNA adducts at the O(6)-position of guanine are a major factor in the carcinogenic, mutagenic, apoptopic and clastogenic actions of methylating agents and chloroethylating agents. Studies with transgenic mice in which alkyltransferase levels are increased or decreased confirm the importance of this repair pathway in protecting against carcinogenesis. Alkyltransferase activity in tumors protects them from therapeutic agents such as temozolomide and BCNU. This resistance is abolished by O(6)-benzylguanine and this drug is currently in clinical trials to enhance cancer chemotherapy by these agents. Studies are in progress to reduce the toxicity of such therapy towards the bone marrow by gene therapy to express alkyltransferases with mutations imparting resistance to O(6)-benzylguanine at high levels in marrow stem cells. Several polymorphisms in the human alkyltransferase gene have been identified but the significance of these in terms of alkyltransferase action is currently unknown.