Cellular eukaryotic mRNAs are capped at their 5 ends with a 7-methylguanosine nucleotide, a structural feature that has been shown to be important for conferring mRNA stability, stimulating mRNA biogenesis (splicing, poly(A) addition, nucleocytoplasmic transport), and increasing translational efficiency. Whereas yeast mRNAs have no additional modifications to the cap, called cap0, higher eukaryotes are methylated at the 2-O-ribose of the first or the first and second transcribed nucleotides, called cap1 and cap2, respectively. In the present study, we identify the methyltransferase responsible for cap1 formation in human cells, which we call hMTr1 (also known as FTSJD2 and ISG95). We show in vitro that hMTr1 catalyzes specific methylation of the 2-O-ribose of the first nucleotide of a capped RNA transcript. Using siRNA-mediated knockdown of hMTr1 in HeLa cells, we demonstrate that hMTr1 is responsible for cap1 formation in vivo.Eukaryotic cytoplasmic mRNAs are capped at their 5Ј end with a 7-methylguanosine (m 7 GpppN, where N is any nucleotide) (1). This cap is important for mRNA stability and for efficient translation initiation (for reviews, see Refs. 2, 3). The capping of mRNAs is a co-transcriptional process that requires RNA triphosphatase, RNA guanylyltransferase, and RNA methyltransferase activities (4, 5). In higher eukaryotes, the RNA triphosphatase and RNA guanylyltransferase reactions are carried out by a single bifunctional protein, whereas the methyltransferase reaction depends on a separate enzyme. The 5Ј cap structure in yeast has no additional modification and is referred to as cap0 (6). However, in higher eukaryotes, the cap structure contains 2Ј-O-ribose methylations at either the first nucleotide (named cap1) or the first and second nucleotide (cap2) (7, 8) (Fig. 1A). When the first nucleotide of the transcript is an adenosine, the base can also be methylated at the N6 position (9). Viruses that replicate in the cytoplasm, such as vesicular stomatitis virus (10), coronavirus (11), and West Nile virus (12), often encode their own capping enzymes as well as a cap 2Ј-O-ribose methyltransferase activity.The kinetoplastids such as Trypanosoma brucei are a special case. Their mRNAs are capped with a spliced leader sequence containing a total of seven methylations, including 2Ј-O-ribose methylations on the first four nucleotides (cap4) (13-15). The T. brucei 2Ј-O-ribose methyltransferases responsible for methylation of the first three positions have been identified and characterized (16 -20). Knock out of the enzymes required for methylating nucleotides 2 and 3 was shown to decrease translation efficiency by 50% (21). In higher eukaryotes, cap ribose methylation was reported to improve translation during Xenopus oocyte maturation (22).Although the existence of cap1 and cap2 have been known for Ͼ30 years, their role in mRNA biogenesis remains obscure, and the enzymes involved in their formation have not yet been identified in mammals. Cap1 and cap2 methyltransferase activity have been partially purif...