Polyketide metabolites produced by modular type I polyketide synthases (PKS) acquire their chemical diversity through the variety of catalytic domains within modules of the pathway. Methyltransferases are among the least characterized of the catalytic domains common to PKS systems. We determined the domain boundaries and characterized the activity of a PKS C-methyltransferase (C-MT) from the curacin A biosynthetic pathway. The C-MT catalyzes S-adenosylmethionine-dependent methyl transfer to the α-position of β-ketoacyl substrates linked to acyl carrier protein (ACP) or a small-molecule analog but does not act on β-hydroxyacyl substrates or malonyl-ACP. Key catalytic residues conserved in both bacterial and fungal PKS C-MTs were identified in a 2 Å crystal structure and validated biochemically. Analysis of the structure and the sequences bordering the C-MT provides insight into the positioning of this domain within complete PKS modules.