The 144-kDa lambda2 protein of mammalian reovirus catalyzes a number of enzymatic activities in the capping of reovirus mRNA, including the transfer of GMP from GTP to the 5' end of the 5'-diphosphorylated nascent transcript. This reaction proceeds through a covalently autoguanylylated lambda2-GMP intermediate. The smaller size of RNA capping guanylyltransferases from other organisms suggested that the lambda2-associated guanylyltransferase would be only a part of this protein. Limited proteinase K digestion of baculovirus-expressed lambda2 was used to generate an amino-terminal M(r) 42,000 fragment that appears to be both necessary and sufficient for guanylyltransferase activity. Although lysine 226 was identified by previous biochemical studies as the active-site residue that forms a phosphoamide bond with GMP in autoguanylylated lambda2, mutation of lysine 226 to alanine caused only a partial reduction in guanylyltransferase activity at the autoguanylylation step. Alanine substitution for other lysines within the amino-terminal region of lambda2 identified lysine 190 as necessary for autoguanylylation and lysine 171 as an important contributor to autoguanylylation. A novel active-site motif is proposed for the RNA guanylyltransferases of mammalian reoviruses and other Reoviridae members.