MAMMALIAN CAPPING ENZYME BINDS RNA AND USES PROTEIN-TYROSINE-PHOSPHATASE MECHANISM

Mammalian capping enzymes are bifunctional proteins with both RNA 5'-t riphosphatase and guanylyltransferase activities. The N-terminal 237-a a triphosphatase domain contains (I/V)HCXXGXXR(S/T)G, a sequence corre sponding to the conserved active-site motif in protein tyrosine phosph atases (PTPs), Analysis of point mutants of mouse RNA 5'-triphosphatas e identified the motif Cys and Arg residues and an upstream Asp as req uired for activity. Like PTPs, this enzyme was inhibited by iodoacetat e and VO43- and independent of Mg2+, providing additional evidence for phosphate removal from RNA 5' ends by a PTP-like mechanism. The full- length, 597-aa mouse capping enzyme and the C-terminal guanylyltransfe rase fragment (residues 211-597), unlike the triphosphatase domain, bo und poly (U) and were nuclear in transfected cells. RNA binding was in creased by GTP and a guanylylation-defective, active-site mutant was n ot affected. Ala substitution at positions required for the formation of the enzyme-GMP capping intermediate (R315, R530, K533, or N537) als o eliminated poly (U) binding, while proteins with conservative substi tutions at these sites retained binding but not guanylyltransferase ac tivity. These results demonstrate that the guanylyltransferase domain of mammalian capping enzyme specifies nuclear localization and RNA bin ding. Association of capping enzyme with nascent transcripts may act i n synergy with RNA polymerase II binding to ensure 5' cap formation.