The biological methylation cytosine bases in DNA is central to such diverse phenomena as restriction and modification in bacteria, repeat induced point-mutation (RIPing) in fungi and for programming gene expression patterns in vertebrates. Structural studies on HhaI DNA methyltransferase, together with the sequence comparisons of around 40 cytosine-specific DNA methyltransferases, have recently provided a molecular framework for understanding the mechanism of action of the related group of enzymes that catalyse this base modification. There are, however, a number of organisms, including Saccharomyces cerevisiae, Schizosaccharomyces pombe and Drosophila melanogaster, which have no detectable DNA methylation. Here we report that the product of the pmt1 gene recently identified in S. pombe, which contains most of the primary structure elements of a typical cytosine-specific DNA methyltransferase, is catalytically inert owing to the insertion of a Ser residue between the Pro-Cys motif found at the active site of all such DNA methyltransferases. Following deletion of this Ser residue, catalytic activity is restored and, using a range of DNA binding experiments, it is shown that the enzyme recognises and methylates the sequence CC(A/T)GG, the same sequence that is modified by the product of the Escherichia coli dcm gene. The pmt gene of S. pombe therefore encodes a pseudo DNA methyltranferase, which we have called psiM.SpoI.