The product of the PET56 nuclear gene of Saccharomyces cerevisiae was shown to be required for ribose methylation at a universally conserved nucleotide in the peptidyl transferase center of the mitochondrial large ribosomal RNA (21S rRNA). Cells reduced in this activity were deficient in formation of functional large subunits of the mitochondrial ribosome. The purified Pet56 protein catalyzed the site-specific formation of 2'-O-methylguanosine on in vitro transcripts of both mitochondrial 21S rRNA and Escherichia coli 23S rRNA. These results provide evidence for an essential modified nucleotide in rRNA.