We report that the A103R protein of Chlorella virus PBCV-1 is an mRNA capping enzyme that catalyzes the transfer of GMP from GTP to the 5' diphosphate end of RNA. This is a two-step reaction in which the enzyme first condenses with GTP to form a covalent enzyme-GMP intermediate and then transfers the GMP to an RNA acceptor to form a GpppN cap. Purified recombinant Al03R is a 38-kDa monomer that lacks RNA (guanine-7-) methyltransferase activity. With respect to its size, amino acid sequence, and biochemical properties, A103R is more closely related to the yeast RNA guanylyltransferases than it is to the multifunctional capping enzymes coded for by other large DNA viruses--the poxviruses and African swine fever virus. We surmise that in order to cap its transcripts, PBCV-l must either encode additional 5' processing activities or else rely on the host alga to provide these functions.