Chloromethane, a gaseous natural product implicated in methylation processes in Phellinus pomaceus, has been shown to act as methyl donor in veratryl alcohol biosynthesis in the lignin-degrading fungi Phanerochaete chrysosporium, Phlebia radiata, and Coriolus versicolor, none of which released detectable amounts of CH(3)Cl during growth. When P. chrysosporium was grown in a medium containing CH(3)Cl, levels of CH(3) incorporation into the 3- and 4-O-methyl groups of veratryl alcohol were very high and initially similar to those observed when the medium was supplemented with l-[methyl-H(3)]methionine. When CH(3)Cl was added to cultures actively synthesizing veratryl alcohol, incorporation of CH(3) was very rapid, with 81% of veratryl alcohol labeled after 12 h. By contrast, incorporation of CH(3) from l-[methyl-H(3)]methionine was comparatively slow, attaining 10% after 12 h. It is proposed that these lignin-degrading fungi possess a tightly channeled multienzyme system in which CH(3)Cl biosynthesis is closely coupled to CH(3)Cl utilization for methylation of veratryl alcohol precursors.