Purified vaccinia virions contain an enzyme that incorporates methyl groups from S-adenosylmethionine into viral RNA synthesized by the core-associated DNA-dependent RNA polymerase. This incorporation, by partially disrupted virions, was dependent on the presence of all four ribonucleoside triphosphates and Mg(++) and was inhibited by actinomycin D. At saturation, 2.3 methyl groups were incorporated per 1000 nucleotides. The methyl-labeled RNA product was sensitive to alkali and ribonucleases and hybridized to filters containing immobilized poly(U) or vaccinia DNA. The methyl groups were not located on the 3'-terminal polyadenylate sequence, nor were they randomly distributed along the RNA chain. The lability of a large portion of the methyl groups to perchloric acid digestion was consistent with an O-methyl linkage, and the chromatographic properties of the alkali-digested material suggested that either the 5'-terminus or up to three consecutive internal nucleotides were methylated. Methylation probably occurs at the macromolecular level, since added vaccinia RNA was a suitable substrate. The failure of heterologous rRNA and tRNA species as well as homopolyribonucleotides to act as substrate suggested that a specific sequence might be required.