Young leaves from Catharanthus roseus plants contain a novel N-methyltransferase which transfers the methyl group from S-adenosyl-L-methionine specifically to position 1 of (2R, 3R)-2,3-dihydro-3-hydroxytabersonine, producing the N-methylated product. The enzyme shows a high degree of specificity toward substrates containing a reduced double bond at position 2,3 of tabersonine derivatives but the more substituted N-desmethyldeacetylvindoline did not act as a substrate. The enzyme catalyses the third last step in vindorosine and vindoline biosynthesis, and is associated with chlorophyll-containing fractions in partially purified enzyme preparations. The lack of vindoline accumulation in cell suspension cultures is correlated with the lack of expression of this enzyme activity as well as that of an acetyltransferase which catalyses the last step in vindoline biosynthesis. Neither fungal elicitor treatment of cell line #615 nor transfer to alkaloid production medium resulted in expression of these two enzyme activities, nor was either enzyme activity detected in photoautotrophic or hormone autotrophic cultures. Cell lines #200, 615-767 and 916 could not be induced to produce DAT or NMT enzyme activities.