Saccharomyces cerevisiae RNA triphosphatase (Cet1) and RNA guanylyltransferase (Ceg1) interact in vivo and in vitro to form a bifunctional mRNA capping enzyme complex. Here we show that the guanylyltransferase activity of Ceg1 is highly thermolabile in vitro (98% loss of activity after treatment for 10 min at 35 degrees C) and that binding to recombinant Cet1 protein, or a synthetic peptide Cet1(232-265), protects Ceg1 from heat inactivation at physiological temperatures. Candida albicans guanylyltransferase Cgt1 is also thermolabile and is stabilized by binding to Cet1(232-265). In contrast, Schizosaccharomyces pombe and mammalian guanylyltransferases are intrinsically thermostable in vitro and they are unaffected by Cet1(232-265). We show that the requirement for the Ceg1-binding domain of Cet1 for yeast cell growth can be circumvented by overexpression in high gene dosage of a catalytically active mutant lacking the Ceg1-binding site (Cet1(269-549)) provided that Ceg1 is also overexpressed. However, such cells are unable to grow at 37 degrees C. In contrast, cells overexpressing Cet1(269-549) in single copy grow at all temperatures if they express either the S. pombe or mammalian guanylyltransferase in lieu of Ceg1. Thus, the cell growth phenotype correlates with the inherent thermal stability of the guanylyltransferase. We propose that an essential function of the Cet1-Ceg1 interaction is to stabilize Ceg1 guanylyltransferase activity rather than to allosterically regulate its activity. We used protein-affinity chromatography to identify the COOH-terminal segment of Ceg1 (from amino acids 245-459) as an autonomous Cet1-binding domain. Genetic experiments implicate two peptide segments, (287)KPVSLYVW(295) and (337)WQNLKNLEQPLN(348), as likely constituents of the Cet1-binding site on Ceg1.