A baculovirus expression system was used to determine the contribution of carboxyl methylation of specific G protein gamma subunits to the interaction between alpha and beta gamma subunits. beta gamma subunits were carboxyl methylated by a membrane bound methyltransferase in Sf9 cells, and periodate-oxidized adenosine inhibited this methylation by 90%. Carboxyl methylation of beta(1) gamma(2), beta(2) gamma(3), and beta(2) gamma(7) enhanced pertussis toxin-catalyzed ADP-ribosylation of alpha(i2) and alpha(i3) by about 2-fold. On the other hand, methylation did not enhance membrane attachment of beta gamma subunits. These results suggest that methylation of isoprenylated gamma subunits is required for optimal G protein-mediated signal transduction, but not membrane attachment.