Mutations in the presenilin genes have been shown to cause the majority of cases of early-onset familial Alzheimer's disease (AD). In addition to their role in AD, presenilins are also known to function during development by interacting with the Notch pathway. To determine if presenilins have additional functions during development and AD we have used a yeast two-hybrid approach to search for proteins that can bind to presenilins. Here, we show the identification and characterization of a novel putative methyltransferase (Metl) that interacts with the loop region of Drosophila presenilin as well as human presenilin-1 and presenilin-2, suggesting that this interaction is evolutionarily conserved and functionally important. Metl appears to be a member of a conserved family of methyltransferases that share homology with, but are distinct from, the UbiE family of methyltransferases involved in ubiquinone and menaquinone biosynthesis. In Drosophila, the metl gene gives rise to two major isoforms by alternative splicing that are broadly expressed throughout development and found in the central nervous system in an overlapping pattern with Drosophila presenilin. Finally, we show that two independent dominant adult phenotypes produced by overexpression of presenilin can be enhanced by overexpression of metl in the same tissue. Taken together, these results suggest that presenilin and Metl functionally and genetically interact during development.