Genome sequence comparisons among multiple species of Pyrococcus, a hyperthermophilic archaeon, revealed a linkage between a putative restriction-modification gene complex and several large genome polymorphisms/rearrangements. From a region apparently inserted into the Pyrococcus abyssi genome, a hyperthermoresistant restriction enzyme [PabI; 5'-(GTA/C)] with a novel structure was discovered. In the present work, the neighboring methyltransferase homologue, M.PabI, was characterized. Its N-terminal half showed high similarities to the M subunit of type I systems and a modification enzyme of an atypical type II system, M.AhdI, while its C-terminal half showed high similarity to the S subunit of type I systems. M.PabI expressed within Escherichia coli protected PahI sites from RsaI, a PabI isoschizomer. M.PabI, purified following overexpression, was shown to generate 5'-GTm6AC, which provides protection against PabI digestion. M.PabI was found to be highly thermophilic; it showed methylation at 95 degrees C and retained at least half the activity after 9 min at 95 degrees C. This hyperthermophilicity allowed us to obtain activation energy and other thermodynamic parameters for the first time for any DNA methyltransferases. We also determined the kinetic parameters of k(cat), K-m,K- DNA, and K-m,K- AdoMet. The activity of M.PabI was optimal at a slightly acidic pH and at an NaCl concentration of 200 to 500 mM and was inhibited by Zn2+ but not by Mg2+, Ca2+, or Mn2+. These and previous results suggest that this unique methyltransferase and PahI constitute a type II restriction-modification gene complex that inserted into the P. abyssi genome relatively recently. As the most thermophilic of all the characterized DNA methyltransferases, M.PabI may help in the analysis of DNA methylation and its application to DNA engineering.