Several proteins associated with signal transduction in eukaryotes are carboxyl methylated at COOH-terminal S-farnesylcysteine residues. These include members of the Ras superfamily and gamma-subunits of heterotrimeric G-proteins. The enzymes that catalyze the carboxyl methylation reaction also methylate small molecules such as N-acetyl-S-trans, trans-farnesyl-L-cysteine (AFC). AFC inhibits carboxyl methylation of p21ras and related proteins both in vitro and in vivo. Saturating concentrations of AFC cause a greater than 80% inhibition of chemotactic responses of mouse peritoneal macrophages. Our results suggest that carboxyl methylation may play a role in the regulation of receptor-mediated signal transduction processes in eukaryotic cells.