An enzyme catalyzing the O-methylation of acetovanillone (3-methoxy-4-hydroxyacetophenone) by S-adeno-sylmethionine was isolated from Phanerochaete chrysosporium and purified 270-fold by ultrafiltration, anion-exchange chromatography, and gel filtration. The enzyme exhibited a pH optimum between 7 and 9 and was rapidly denatured at temperatures above 55 degrees C. The K(m) values for acetovanillone and S-adenosylmethionine were 34 and 99 muM, respectively. S-Adenosylhomocysteine acted as a powerful competitive inhibitor of S-adenosylmethionine, with a K(i) of 41 muM. The enzyme was also susceptible to inhibition by thiol reagents and low concentrations of heavy metal ions. Gel filtration and sodium dodecyl sulfate-polyacrylamide gel electrophoresis indicated that the enzyme was monomeric and had a molecular weight of approximately 53,000. Substrate specificity studies showed that 3-methoxy- and 3,5-dimethoxy-substituted 4-hydroxy-benzaldehydes, -benzoic acids, and -acetophenones were the preferred substrates for the enzyme. The corresponding 3,4-dihydroxy compounds were methylated relatively slowly, while the 3-hydroxy-4-methoxy compounds were almost inactive as substrates. Substituents in both the 2 and 4 positions relative to the hydroxyl group appeared to be essential for significant enzyme attack of a substrate. Provided that certain steric criteria were satisfied, the nature of the substituent was not critical. Hence, xenobiotic compounds such as 2,4-dichlorophenol and 2,4-dibromophenol were methylated almost as readily as acetovanillone. However, an extended side chain in the 4 position was not compatible with activity as a substrate, and neither homovanillic, caffeic, nor ferulic acid was methylated. The substrate range of the O-methyltransferase tends to imply a role in the catabolism or detoxification of lignin degradation products such as vanillic and syringic acids.