The covalent modification of histone tails has regulatory roles in various nuclear processes, such as control of transcription and mitotic chromosome condensation. Among the different groups of enzymes known to catalyze the covalent modification, the most recent additions are the histone methyltransferases (HMTases), whose functions are now being characterized. Here we show that a SET domain-containing protein, G9a, is a novel mammalian lysine-preferring HMTase. Like Suv39 h1, the first identified lysine-preferring mammalian HMTase, G9a transfers methyl groups to the lysine residues of histone H3, but with a 10-20-fold higher activity. It was reported that lysines 4, 9, and 27 in H3 are methylated in mammalian cells. G9a was able to add methyl groups to lysine 27 as well as 9 in H3, compared with Suv39 h1, which was only able to methylate lysine 9. Our data clearly demonstrated that G9a has an enzymatic nature distinct from Suv39 h1 and its homologue h2. Finally, fluorescent protein-labeled G9a was shown to be localized in the nucleus but not in the repressive chromatin domains of centromeric loci, in which Suv39 h1 family proteins were localized. This finding indicates that G9a may contribute to the organization of the higher order chromatin structure of non-centromeric loci.