The effects of progesterone and GTP gamma S on phospholipid N-methylation and sphingomyelin synthesis were studied in plasma-vitelline membranes isolated from amphibian (Rana pipiens) oocytes. Plasma-vitelline membranes were preincubated with S-adenosyl-L-[methyl-H-3]methionine for 2 min at 20 degrees C and total phospholipids extracted at 0, 15, 30 and 60 s after addition of progesterone and/or GTP gamma S. Progesterone levels (3 mu M) that induce meiosis in the intact oocyte stimulated [H-3-methyl]incorporation into phosphatidylmonomethylethanolamine (PME) 9-10-fold over the first 60 s, with smaller increases in phosphatidyldimethylethanol amine (PDE) and phosphatidylcholine (PC). [methyl-H-3] labeling of sphingomyelin (SM) rises after 30 s, approaching that of [methyl-H-3]PME by 60 s. 17 beta-Estradiol, a noninducer of meiosis, was inactive. When oocytes were prelabeled with [H-3]palmitic acid, it was found that a fall in [H-3]ceramide coincides with the transient increase in [H-3]SM, indicating that the end product of N-methylation (PC) undergoes a transfer reaction with ceramide to form SM and 1,2-DG. GTP gamma S levels previously reported to stimulate PC-specific phospholipase C activity in oocyte plasma membranes (5 mu M) also stimulated both [methyl-H-3]PME and [methyl-H-3]SM formation. An inhibitor of phospholipid N-methyIation, 2(methyl-amino)ethanol, blocked stimulation of [methyl-H-3]SM synthesis by both progesterone and GTP gamma S as well as induction of meiosis by progesterone. Progesterone thus acts at the oocyte plasma membrane to stimulate PE N-methytransferase and SM synthase. The finding that GTP gamma S mimics progesterone suggests that N-methyltransferase is mediated by G-protein(s). The transient increase in 1,2-DG which we had previously reported to occur within 1-2 min following progesterone stimulation of the Rana oocyte appears to arise from PC by two different pathways: SM synthesis and hydrolysis of PC by phospholipase C.