Most eukaryotic mRNAs contain a 5' cap (m7GppX) and a 3' poly(A) tail to increase synergistically the translational efficiency. Recently, the poly(A) binding protein (PABP) and cap-binding protein, eIF-4F, were found to interact [Le et al. (1997) J. Biol. Chem. 272, 16247-16255; Tarun and Sachs (1996) EMBO J. 15, 7168-7177]. These data suggest that PABP may exert its effect on translational efficiency either by increasing the formation of initiation factor-mRNA complex or by enhancing ribosome recycling. To investigate the functional consequences of these interactions, the fluorescent cap analogue, ant-m7GTP, which is an environmentally sensitive fluorescent probe [Ren and Goss (1996) Nucleic Acids Res. 24, 3629-3634] was used to investigate the cap-binding affinity. Our data show that the binding of eIF-(iso)4F or eIF-4F to cap analogue enhanced their binding affinity toward PABP approximately 40-fold. Similarly, the eIF-4F/PABP or eIF-(iso)4F/PABP complexes show a 40-fold enhancement of cap analogue binding as compared to eIF-4F or eIF-(iso)4F alone. At least part of the enhancement of the translational initiation by PABP can be accounted for by direct changes in cap-binding affinity. The interactions of these components also suggest a mechanism whereby the poly(A) tail is brought into close proximity with m7G cap. This effect was examined by fluorescence energy transfer, and it was determined that the PABP/eIF-4F complex could bind both poly(A) and 5' cap simultaneously.