The 5' - termini of most eukaryotic and viral mRNAs contain the sequence of m7G(5')ppp(5')N- known as the "cap" structure. The guanine-7 methylation of this cap structure is important for mRNA processing and initiation of translation. A RNA (guanine-7)-methyltransferase that specifically methylates the 5'-terminal guanosine residue of the RNA cap structure has been purified about 280-fold from the nucleoplasm of Ehrlich ascites cells. This enzyme activity was elevated eight fold in Ehrlich ascites tumor cells when compared to the methyl transferase activity from normal mouse liver cells. The enzyme catalyzed the methyl group transfer from S-adenosylmethionine to a capped but unmethylated RNA substrate. The purified enzyme had an apparent native molecular weight of 95,000, as determined by gel filtration chromatography. SDS-PAGE showed a predominant protein band of 46,000 daltons suggesting that the native enzyme consisted of two identical subunits. The enzyme was unstable when the protein concentration was low but was stable when stored at -20°C in a buffer containing 50% glycerol. The (guanine-7)-methyltransferase showed a pH optimum at 8.0. Two monovalent ions, potassium and sodium, stimulate the enzyme activity with an optimum concentration of 0.05 M. The enzyme does not require magnesium for activity. Instead, this divalent ion and two others, manganese and calcium, were found to inhibit enzyme activity at concentrations as low as 5 mM.