1. Methylation of endogenous lipids by homogenates of rat insulinoma cells was studied. 2. 3H-methyl groups (38 pmol/mg protein per 10 min) from [3H-methyl]S-adenosyl-L-methionine were incorporated into endogenous lipids, mainly (greater than 80%) into the neutral lipid fraction. 3. The reaction was sensitive to heat, was almost abolished by S-adenosyl-L-homocysteine, but insensitive to the addition of EGTA (5 mM), Ca2+ (5-100 microM) and/or calmodulin (15 microns). 4. At concentrations relevant for calmodulin antagonistic activity strong inhibition by W7 and trifluoperazine (25-100 microM each), but not by CGS 9343B (10 microM), was observed. 5. Calmodulin antagonists of phenothiazine- and sulfonamide-type appear to block the fatty acid methyltransferase in a way unrelated to calmodulin.