A scheme of eukaryotic phylogeny has been suggested based on the structure and physical linkage of the RNA triphosphatase and RNA guanylyltransferase enzymes that catalyze mRNA cap formation. Here we show that the unicellular pathogen Giardia lamblia encodes an mRNA capping apparatus consisting of separate triphosphatase and guanylyltransferase components, which we characterize biochemically. We also show that native Giardia mRNAs have blocked 5'-ends and that 7-methylguanosine caps promote translation of transfected mRNAs in Giardia in vivo. The Giardia triphosphatase belongs to the tunnel family of metal-dependent phosphohydrolases that includes the RNA triphosphatases of fungi, microsporidia, and protozoa such as Plasmodium and Trypanosoma. The tunnel enzymes adopt a unique active-site fold and are structurally and mechanistically unrelated to the cysteine-phosphatase-type RNA triphosphatases found in metazoans and plants, which comprise part of a bifunctional triphosphataseguanylyltransferase fusion protein. All available evidence now points to the separate tunnel-type triphosphatase and guanylyltransferase as the aboriginal state of the capping apparatus. We identify a putative tunnel-type triphosphatase and a separate guanylyltransferase encoded by the red alga Cyanidioschyzon merolae. These findings place fungi, protozoa, and red algae in a common lineage distinct from that of metazoa and plants.