Abstract: The 5' cap structure (m(7)GpppX-) is an essential feature of eukaryotic mRNA required for mRNA stability and efficient translation. Influenza virus furnishes its mRNA with this structure by a cap-snatching mechanism, in which the viral polymerase cleaves host mRNA endonucleolytically 10-13 nucleotides from the 5' end and utilizes the capped fragment as a primer to synthesize viral transcripts. Here we report a unique cap-snatching mechanism by which the yeast double-stranded RNA totivirus L-A furnishes its transcript with a cap structure derived from mRNA. Unlike influenza virus, L-A transfers only m(7)Gp from the cap donor to the 5' end of the viral transcript, thus preserving the 5' a- and ?-phosphates of the transcript in the triphosphate linkage of the final product. This in vitro capping reaction requires His154 of the coat protein Gag, a residue essential for decapping of host mRNA and known to form m(7)Gp-His adduct. Furthermore, the synthesis of capped viral transcripts in vivo and their expression were greatly compromised by the Arg154 mutation, indicating the involvement of Gag in the cap-snatching reaction. The overall reaction and the structure around the catalytic site in Gag resemble those of guanylyltransferase, a key enzyme of cellular mRNA capping, suggesting convergent evolution. Given that Pol of L-A is confined inside the virion and unable to access host mRNA in the cytoplasm, the structural protein Gag rather than Pol catalyzing this unique cap-snatching reaction exemplifies the versatility as well as the adaptability of eukaryotic RNA viruses.