Glycine N-methyltransferase (EC 126.96.36.199) was recently identified as a major folate binding protein of rat liver cytosol (Wagner, C., and Cook, R. J. (1984) Proc. Natl. Acad. Sci. U.S.A. 81, 3631-3634). Activity of the enzyme is inhibited when the natural folate ligand, 5-methyltetrahydropteroylpentaglutamate (5-CH3-H4PteGlu5), is bound. It has been suggested that glycine N-methyltransferase plays a role in regulating the availability of methyl groups in the liver. Purified transferase was phosphorylated in vitro by the catalytic subunit of cAMP-dependent protein kinase. If 5-CH3-H4PteGlu5 was first bound to the transferase, phosphorylation was inhibited. Phosphorylation of glycine N-methyltransferase in vitro increased its activity approximately 2-fold. 5-CH3-H4PteGlu5 inhibited the activity of newly phosphorylated enzyme as well as native enzyme. Freshly isolated rat hepatocytes incorporated 32P-labeled inorganic phosphate into this folate binding protein. Chemical analysis of purified enzyme showed about 0.55 mol of phosphate present per mol of glycine N-methyltransferase subunit. These results indicate that phosphorylation of glycine N-methyltransferase may provide a mechanism for modulating the activity of this enzyme and support its role in regulating the availability of methyl groups.