Utilizing the microsomal fraction isolated from hamster liver we have identified and quantitated some of the alkylation lesions introduced into exogenous DNA as a consequence of the microsomally-mediated decomposition of 14C-labeled dimethylnitrosamine and have established correlations between this DNA alkylation and formaldehyde formation. The yield of radiolabeled formaldehyde was assessed by the formaldemethone-precipitation method and the yields of the major methylated purines present in a mild acid hydrolysate of modified DNA determined using cation exchange high pressure liquid chromatography techniques. We found 7-methylguanine, 3-methyladenine and O(6)-methylguanine in our DNA hydrolysates in the same relative proportions as observed in DNA isolated from similar incubation mixtures containing methylnitrosourea as the methylating compound. The rate of DNA methylation was observed to correlate well with the rate of formaldehyde formation and, even thought the absolute formaldehyde and DNA methylation yields varied in experiments done on different days, the relative yields were found to be consistent. Both processes were NADPH dependent, both were inhibited by carbon monoxide, and both were equally sensitive to chemical agents which appear to interfere with dimethylnitrosamine metabolism in vivo.