We have isolated three Saccharomyces cerevisiae genes-CES1, CES2, and CES3-- that, when present in high copy, suppress the ts growth defect caused by mutations in the CEG1 gene encoding mRNA guanylyltransferase (capping enzyme). Molecular characterization of the capping enzyme suppressor genes reveals the following. CES2 is identical to ESP1, a gene required for proper nuclear division. We show by deletion analysis that the 1573-amino acid ESP1 polypeptide is composed of distinct functional domains. The C-terminal portion of ESP1 is essential for cell growth, but dispensable for CES2 activity. The N-terminal half of ESP1, which is sufficient for CES2 function, displays local sequence similarity to the small subunit of the vaccinia virus RNA capping enzyme. This suggests a basis for suppression by physical or functional interaction between the CES2 domain of ESP1 and the yeast guanylyltransferase. CES1 encodes a novel hydrophilic 915-amino acid protein. The amino acid sequence of CES1 is uninformative, except for its extensive similarity to another yeast gene product of unknown function. The CES1 homologue (designated CES4) is also a multicopy suppressor of capping enzyme ts mutations. Neither CES1 nor CES4 is essential for cell growth, and a double deletion mutant is viable. CES3 corresponds to BUD5, which encodes a putative guanine nucleotide exchange factor. We hypothesize that CES1, CES4, and BUD5 may impact on RNA transactions downstream of cap synthesis that are cap dependent in vivo.