Polypeptide release factors from eubacteria and eukaryotes, although similar in function, belong to different protein families. They share one sequence motif, a GGQ tripeptide that is vital to release factor (RF) activity in both kingdoms. In bacteria, the Gln residue of the motif in RF1 and RF2 is modified to N(5)-methyl-Gln by the S-adenosyl l-methionine-dependent methyltransferase PrmC and the absence of Gln methylation decreases the release activity of Escherichia coli RF2 in vitro severalfold. We show here that the same modification is made to the GGQ motif of Saccharomyces cerevisiae release factor eRF1, the first time that N(5)-methyl-Gln has been found outside the bacterial kingdom. The product of the YDR140w gene is required for the methylation of eRF1 in vivo and for optimal yeast cell growth. YDR140w protein has significant homology to PrmC but lacks the N-terminal domain thought to be involved in the recognition of the bacterial release factors. Overproduced in S. cerevisiae, YDR140w can methylate eRF1 from yeast or man in vitro using S-adenosyl l-methionine as methyl donor provided that eRF3 and GTP are also present, suggesting that the natural substrate of the methyltransferase YDR140w is the ternary complex eRF1.eRF3.GTP.