The Azorhizobium caulinodans strain ORS571 nodulation genes nodSUIJ were located downstream from nodABC. Complementation data and transcriptional analysis suggest that nodABCSUIJ form a single operon. Mutants with Tn5 insertions in the genes nodS, nodU, and nodJ were delayed in nodulation of Sesbania rostrata roots and stems. The NodS amino acid sequences of ORS571, Bradyrhizobium japonicum, and Rhizobium sp. strain NGR234, contain a consensus with similarity to S-adenosylmethionine (SAM)-utilizing methyltransferases. A naringenin-inducible nodS-dependent protein of approximately 25 kDa could be cross-linked to radiolabelled SAM. By applying L-[methyl-3H]-methionine in vivo, Nod factors of ORS571, known to be N-methylated, could be labelled in wild type and nodU mutants but not in nodS mutants. Therefore, we propose that NodS is a SAM-utilizing methyltransferase involved in Nod factor synthesis.