Prenylation is necessary for association of the petunia calmodulin CaM53 with the plasma membrane. To determine whether post-prenylation processing of the protein was also required for plasma membrane targeting, we studied the subcellular localization of a GFP-labelled CaM53 reporter in yeast and plant cells. Blocking of carboxyl-methylation of prenylated proteins either by a specific inhibitor or in mutant yeast cells resulted in localization of green fluorescence to what appears to be the endomembrane system, in contrast with the plasma membrane localization observed in control cells. We show that a prenyl-cysteine methyltransferase (PCM) activity that carboxyl-methylates prenylated CaM53 also exists in plant cells, and that it is required for efficient plasma membrane targeting. We also report an Arabidopsis gene with homology to PCM and demonstrate that it encodes a protein with PCM activity that localizes to the endomembrane system of plant cells, similar to prenylated but unmethylated CaM53. Together, our data suggest that, following prenylation, CaM53 is probably associated with the endomembrane system, where a PCM activity methylates the prenylated protein prior to targeting it to its final destination in the plasma membrane.