A 150,000-g supernatant from axoplasm of the giant axon of the stellate nerve of the squid and from rat sciatic and goldfish optic nerves was found to be able to incorporate covalently [3H]putrescine and [3H]spermidine into an exogenous protein (N,N'-dimethylcasein). Incorporation of radioactivity was inhibited by CuSO4, a specific inhibitor of transglutaminases, the enzymes mediating these reactions in other tissues. Analysis of pH and temperature range and enzyme kinetics displayed characteristics predicted for transglutaminase-mediated reactions. Transglutaminase activity increased during regeneration of both vertebrate nerves, but greater activity was found in segments of nerve containing no intact axons than in either intact segments or in segments containing regenerating axons. Polyacrylamide gel electrophoresis of endogenous modified proteins (in the absence of N,N'-dimethylcasein) showed labeling of 18-, 46- and 200-kilodalton proteins by both [3H]putrescine and [3H]spermidine. Analysis of the protein-bound radioactivity from intact and regenerating rat sciatic nerves demonstrated it to be predominantly in the form of the parent radioactive polyamine. These experiments demonstrate the covalent modification of proteins by polyamines at low levels in squid axoplasm and at relatively higher levels in rat sciatic and goldfish optic nerves. In the latter two cases, the activity of these modification reactions may be due in part to the modification of axonal proteins, but the majority of the activity occurs in nonneuronal cells of the nerve.