RNA cap guanine-N2 methyltransferases such as Schizosaccharomyces pombe Tgs1 and Giardia lamblia Tgs2 catalyze methylation of the exocyclic N2 amine of 7-methylguanosine. Here we performed a mutational analysis of Giardia Tgs2, entailing an alanine scan of 17 residues within the minimal active domain. Alanine substitutions at Phe18, Thr40, Asp76, Asn103 and Asp140 reduced methyltransferase specific activity to <3% of wild-type Tgs2, thereby defining these residues as essential. Alanines at Pro142, Tyr148 and Pro185 reduced activity to 7-12% of wild-type. Structure-activity relationships at Phe18, Thr40, Asp76, Asn103, Asp140 and Tyr148, and at three other essential residues defined previously (Asp68, Glu91 and Trp143) were gleaned by testing the effects of 18 conservative substitutions. Our results engender a provisional map of the Tgs2 active site, which we discuss in light of crystal structures of related methyltransferases. A genetic analysis of S. pombe Tgs1 showed that it is nonessential. An S. pombe tgs1Delta strain grows normally, notwithstanding the absence of 2,2,7-trimethylguanosine caps on its U1, U2, U4 and U5 snRNAs. However, we find that S. pombe requires cap guanine-N7 methylation catalyzed by the enzyme Pcm1. Deletion of the pcm1(+) gene was lethal, as were missense mutations in the Pcm1 active site. Thus, whereas m(7)G caps are essential in both S. pombe and S. cerevisiae, m(2,2,7)G caps are not.