© 2020 by the authors. Licensee MDPI, Basel, Switzerland. S-Adenosylmethionine (SAM)-dependent methyltransferases are important tools for the biocatalytic methylation of diverse biomolecules. Methylation by a whole-cell biocatalyst allows the utilization of intrinsic SAM and its regeneration system, which consists of a cyclic and multi-step enzymatic cascade. However, low intracellular availability of 5-methyl-tetrahydrofolate (5-methyl-THF), which functions as a methyl group donor, limits SAM regeneration. Here, we integrated methanol metabolism with 5-methyl-THF formation into SAM-dependent methylation system in Escherichia coli, driven by heterologously expressed methanol dehydrogenase (MDH). The coupling of MDH-catalyzed methanol oxidation with the E. coli endogenous reactions enhances the formation of 5-methyl-THF using methanol as a source of methyl group, thereby promoting both the SAM regeneration and methylation reactions. Co-expression of the mutant MDH2 from Cupriavidus necator N-1 with the O-methyltransferase 5 from Streptomyces avermitilis MA-4680 enhanced O-methylation of esculetin 1.4-fold. Additional overexpression of the E. coli endogenous 5,10-methylene-THF reductase, which catalyzes the last step of 5-methyl-THF formation, further enhanced the methylation reaction by 1.9-fold. Together with deregulation of SAM biosynthesis, the titer of methylated compounds was increased about 20-fold (from 0.023 mM to 0.44 mM). The engineered E. coli strain with enhanced 5-methyl-THF formation is now available as a chassis strain for the production of a variety of methylated compounds.