Methylating agents are widely distributed environmental mutagens. To identify mechanisms that protect cells against the toxic effects of methylating compounds Chinese hamster ovary (CHO) cells were transfected with human DNA and selected for resistance to methylating agents. From methylation-resistant transfectants, human DNA was cloned that conferred methylation resistance to CHO cells. A human cDNA was isolated (designated c81) encoding a protein of 410 amino acids which is partially identical to human lamp-2 encoding a lysosomal membrane glycoprotein. Transfection of c81, but not of the neo gene or a c81 antisense construct, into CHO cells gave rise to significant increases of survivors after methylating treatments. c81 mRNA is expressed both in human, CHO parental, and transfected cells, albeit in different amounts. The methylation-resistant transfectants lacked alkyltransferase activity (Mex- phenotype), did not repair O6-methylguanine in vivo, and neither showed reduced initial DNA methylation level nor increase of removal of 3-methyladenine and 7-methylguanine from DNA. They are therefore representatives of the "tolerance" phenotype. The transfectants also showed a higher serum requirement, flat growth, and a reduced tumor forming ability. The data suggest a link between altered regulation of cell proliferation and acquired resistance to methylating DNA damaging agents.