Viruses represent an attractive system with which to study the molecular basis of mRNA capping and its relation to the RNA transcription machinery. The RNA-dependent RNA polymerase NS5 of flaviviruses presents a characteristic motif of S-adenosyl-L-methionine-dependent methyltransferases at its N-terminus, and polymerase motifs at its C-terminus. The crystal structure of an N-terminal fragment of Dengue virus type 2 NS5 is reported at 2.4 A resolution. We show that this NS5 domain includes a typical methyltransferase core and exhibits a (nucleoside-2'-O-)-methyltransferase activity on capped RNA. The structure of a ternary complex comprising S-adenosyl-L-homocysteine and a guanosine triphosphate (GTP) analogue shows that 54 amino acids N-terminal to the core provide a novel GTP-binding site that selects guanine using a previously unreported mechanism. Binding studies using GTP- and RNA cap-analogues, as well as the spatial arrangement of the methyltransferase active site relative to the GTP-binding site, suggest that the latter is a specific cap-binding site. As RNA capping is an essential viral function, these results provide a structural basis for the rational design of drugs against the emerging flaviviruses.