We constructed a recombinant plasmid carrying a chimeric cDNA that encodes a fusion protein, ER:MGMT, composed of the ligand-binding domain of the human estrogen receptor and the human O6-methylguanine-DNA methyltransferase. By introducing this plasmid into the methyltransferase-deficient human cell line HeLa MR, a system was established in which nuclear translocation of the ER:MGMT fusion protein can be controlled by estrogen. On in situ immunostaining using anti-MGMT, the cytoplasm of ER:MGMT-carrying cells was preferentially stained and nuclear staining occurred only when the cells were exposed to estrogen. The estrogen-dependent nuclear translocation of ER:MGMT was confirmed by Western blotting analysis of fractionated cell extracts. The fusion protein was translocated into the nucleus within 1 h after estrogen treatment and remained there unless estrogen was removed. The methyltransferase activity of the fusion protein was as active as the authentic methyltransferase enzyme, regardless of the presence or absence of estrogen. The ER:MGMT-producing cells were sensitive to 1-(4-amino-2-methyl-5-pyrimidinyl)methyl-3-(2-chloroethyl)-3-nitrosourea (ACNU) in the absence of estrogen, and estrogen treatment rendered the cells as resistant to ACNU as the ordinary Mer+ cell line, HeLa S3, thereby indicating that translocation of the methyltransferase into the nucleus is a prerequisite for repair of the chromosomal DNA damaged by alkylating agents. Taking advantage of the artificial control of cellular localization of the fusion protein, we examined the timing of the nuclear translocation required to execute efficient DNA repair. We obtained evidence that the methyltransferase must repair the DNA damage as soon as the DNA is exposed to ACNU, in order to avoid cell cycle arrest at the G2 phase.