This chapter discusses the enzymatic mechanism of the individual capping reactions and the organization of the functional domains, within the relevant enzymes. Greatest attention is devoted to two model systems, Vaccinia virus and Saccharomyces cerevisim, in which biochemistry, molecular genetics, and protein engineering have fueled considerable progress, since the past review of ribonucleic acid (RNA) capping in this series. It also discusses the genetic studies in yeast that shed light on the physiologic role of the cap in eukaryotic RNA metabolism. Capping may serve to protect the messenger RNA (mRNA) from nucleolytic degradation. Elucidation of the mechanism and potential regulation of cap formation is, thus, pertinent to the understanding of eukaryotic gene expression. Capping occurs, by a series of three enzymatic reactions, in which the 5’ triphosphate terminus of a primary transcript is first cleaved to a diphosphateterminated RNA by RNA triphosphatase, then capped with GMP by RNA guanylyltransferase, and methylated at the N7 position of guanine by RNA (guanine-7) methyltransferase. © 1995 Academic Press Inc.