In addition to an RNA-dependent RNA polymerase, purified vesicular stomatitis virus contains a methyltransferase activity which transfers the methyl group from the methyl donor, S-adenosyl-L-methionine, to two positions in the 5'-terminal capped structure of the nascent mRNA's synthesized in vitro as 7mG-(5)'ppp(5')Apm... In the present study it is shown that two distinct methyltransferase activities are discernible in the purified virus. The in vitro concentrations of the methyl donor specify the number and location of the methyl groups transferred to the capped 5'-termini of VSV mRNA's. Limited concentrations of the methyl donor result in a single methylation of the penultimate base in the 2'-hydroxyl position, that is, G(5')ppp(5')Apm..., whereas saturating concentrations of the methyl donor methylate the blocking guanosine residue at the 7-position, resulting in the dimethylated cap, 7mG(5')ppp(5')Apm... Pulse-chase experiments demonstrate that the monomethylated cap structure is the precursor substrate for the dimethylated cap. In this respect, vesicular stomatitis virus system is quite distinct from the vaccinia and reovirus systems. Virus purified from different host cells including hamster, mouse, and human contain both methyltransferase activities. The mRNA's containing monomethylated capped structures are poor templates for protein synthesis in vitro.