The p21-activated kinase, Shk1, is required for cell viability, establishment and maintenance of cell polarity, and proper mating response in the fission yeast, Schizosaccharomyces pombe. Previous genetic studies suggested that a presumptive protein methyltransferase, Skb1, functions as a positive modulator of Shk1. However, unlike Shk1, Skb1 is not required for viability or mating of S. pombe cells and contributes only modestly to the regulation of cell morphology under normal growth conditions. Here we demonstrate that Skb1 plays a more significant role in regulating cell growth and polarity under conditions of hyperosmotic stress. We provide evidence that the inability of skb1Delta cells to properly maintain cell polarity in hyperosmotic conditions results from inefficient subcellular targeting of F-actin. We show that Skb1 localizes to cell ends, sites of septation, and nuclei of S. pombe cells. Hyperosmotic shock results in substantial delocalization of Skb1 from cell ends and nuclei, as well as stimulation of Skb1 protein methyltransferase activity. Taken together, our results demonstrate a new role for Skb1 as a mediator of hyperosmotic stress response in fission yeast. We show that the protein methyltransferase activity of the human Skb1 homolog, Skb1Hs, is also stimulated by hyperosmotic stress in fission yeast, providing evidence for evolutionary conservation of a role for Skb1-related proteins as mediators of hyperosmotic stress response, as well as mechanisms involved in regulating this novel class of protein methyltransferases.