The yeast protein Hsl7p is a homologue of Janus kinase binding protein 1, JBP1, a newly characterized protein methyltransferase. In this report, Hsl7p also is shown to be a methyltransferase. It can be crosslinked to [H-3]S-adenosylmethionine and exhibits in vitro protein methylation activity. Calf histones H2A and H4 and bovine myelin basic protein were methylated by Hsl7p, whereas histones H1, H2B, and H3 and bovine cytochrome c were not. We demonstrated that JBP1 can complement Saccharomyces cerevisiae with a disrupted HSL7 gene as judged by a reduction of the elongated bud phenotype, and a point mutation in the JBP1 S-adenosylmethionine consensus binding sequence eliminated all complementation by JBP1. Therefore, we conclude the yeast protein Hsl7p is a sequence and functional homologue of JBP1. These data provide evidence for an intricate link between protein methylation and macroscopic changes in yeast morphology.