Arginine methylation has been implicated in the signal transduction pathway leading to cell growth. Here we show that a regenerating rat liver following partial hepatectomy exhibited elevated methyltransferase activity as shown by increased methylation of a subset of endogenous proteins in vitro. The 20-kDa protein was shown to be a major cytosolic protein undergoing methylation in regenerating hepatocytes. Methylation of the 20-kDa protein peaked at 1 d following partial hepatectomy, which gradually declined to a basal level within the next 14 d. Likewise, methylation of exogenously added bulk histones followed the similar time kinetics as the 20-kDa protein, reflecting time-dependent changes in methyltransferase activity in regenerating hepatocytes. Presence of exogenously added bulk histone in the in vitro methylation assay resulted in dose-dependent inhibition of methylation of the 20-kDa protein. All the histone subtypes tested, histone 1, 2A, 2B, 3 or 4, were able to inhibit methylation of the 20-kDa protein while addition of cytochrome C, a-lactalbumin, carbonic anhydrase, bovine serum albumin, and g globulin minimally affected methylation of the 20-kDa protein. Since methylation of the 20-kDa protein preceded proliferation of hepatocytes upon partial hepatectomy, it is tempting to speculate that the methylated 20-kDa protein by activated histone-specific methyltransferase may be involved in an early signal critical for liver regeneration.