The T4 dam+ gene has been cloned (S. L. Schlagman and S. Hattman, Gene 22:139-156, 1983) and transferred into an Escherichia coli dam-host. In this host, the T4 Dam DNA methyltransferase methylates mainly, if not exclusively, the sequence 5'-GATC-3'; this sequence specificity is the same as that of the E. coli Dam enzyme. Expression of the cloned T4 dam+ gene suppresses almost all the phenotypic traits associated with E. coli dam mutants, with the exception of hypermutability. In wild-type hosts, 20- to 500-fold overproduction of the E. coli Dam methylase by plasmids containing the cloned E. coli dam+ gene results in a hypermutability phenotype (G.E. Herman and P. Modrich, J. Bacteriol. 145:644-646, 1981; M.G. Marinus, A. Poteete, and J.A. Arraj, Gene 28:123-125, 1984). In contrast, the same high level of T4 Dam methylase activity, produced by plasmids containing the cloned T4 dam+ gene, does not result in hypermutability. To account for these results we propose that the E. coli Dam methylase may be directly involved in the process of methylation-instructed mismatch repair and that the T4 Dam methylase is unable to substitute for the E. coli enzyme.