The methylated bases of DNA are formed by the transfer of the methyl group from S-adenosylmethionine to a polynucleotide acceptor. This transfer is catalyzed by highly specific enzymes which recognize a limited number of available sites in the DNA. The mechanism for the recognition is presently unknown. In some instances, there is evidence that other cellular components, such as lipopolysaccharides, can influence the methylation reaction. Certain bacteriophages induce new methylases upon infection of their hosts. Phage T3 is unique in establishing an environment in which methylation of neither the phage nor the host nucleic acid can occur. By superinfecting T3-infected cells with other phages, the latter can be obtained with methyl-deficient DNA. Although a great deal is known about the enzymology of the methylation reaction, and there appears to be a strong correlation between the in vitro and in vivo reactions, studies in which DNA is either supermethylated or totally unmethylated have not yielded any insight as to what the possible function of the methylated bases may be.