Poly(A) tail removal is often the initial and rate-limiting step in mRNA decay and is also responsible for translational silencing of maternal mRNAs during oocyte maturation and early development. Here we report that deadenylation in HeLa cell extracts and by a purified mammalian poly(A)-specific exoribonuclease, PARN (previously designated deadenylating nuclease, DAN), is stimulated by the presence of an m(7)-guanosine cap on substrate RNAs. Known cap-binding proteins, such as eIF4E and the nuclear cap-binding complex, are not detectable in the enzyme preparation, and PARN itself binds to m(7)GTP-Sepharose and is eluted specifically with the cap analog m(7)GTP. Xenopus PARN is known to catalyze mRNA deadenylation during oocyte maturation. The enzyme is depleted from oocyte extract with m(7)GTP-Sepharose, can be photocross-linked to the m(7)GpppG cap and deadenylates m(7)GpppG-capped RNAs more efficiently than ApppG-capped RNAs both in vitro and in vivo. These data provide additional evidence that PARN is responsible for deadenylation during oocyte maturation and suggest that interactions between 5' cap and 3' poly(A) tail may integrate translational efficiency with mRNA stability.