Transcription of cloned adenovirus, P-globin, and retrovirus long terminal repeat DNAs in HeLa whole-cell lysate was inhibited by S-adenosylhomocysteine. However, full-length 1.7-kilobase transcripts made on adenovirus 2 late promoter DNA contained 5'-terminal GpppA, consistent with specific initiation and runoff synthesis in the absence of product methylation. Formation of runoff transcripts including retrovirus RNAs that normally contain 5'-m7GpppGpmC was not decreased by replacing GTP with non-hydrolyzable analogs, and Rousassociated virus-2 runoff products made in the presence of GTP-'y-S contained 5'-terminal y-S-pppGpC. The results indicate that capping and specific transcript synthesis by RNA polymerase II are not obligatorily linked in HeLa whole-cell lysate. Accurate initiation is dependent on ATP hydrolysis, and in contrast to GTP, replacement of ATP by 5'-adenylyl-imidodiphosphate blocked specific initiation of transcripts that start with either GTP (Rous-associated virus-2, Rousassociated virus-0) or ATP (P-globin, adenovirus).Eucaryotic cellular mRNAs contain a characteristic 5'-terminal "cap," m7GpppN, that is added to RNA polymerase II nascent products in the nucleus at an early stage of mRNA formation (1,21,24). The minimum transcript size necessary for capping in vivo has not been determined. However, results obtained for several viral mRNAs suggest that capping may be coupled to initiation in some transcription systems. For example, 5'-terminal oligonucleotides initiated in vitro by reovirion-associated transcriptase contain a cap at the dinucleotide level (6,30), and capping appears to be a pretranscriptional event in the formation of mRNA by the double-stranded RNA-dependent RNA polymerase in insect cytoplasmic polyhedrosis virus (5). In addition, it was reported recently that Sadenosylhomocysteine, a competitive inhibitor of methylation, markedly diminishes initiation by RNA polymerase II in HeLa whole-cell lysate (13).Other studies suggest that capping and initiation are not obligatorily linked. RNA polymerase II and mRNA guanylyltransferase can be readily separated during fractionation of HeLa whole-cell lysate (22) cloned adenovirus 2 late promoter DNA in HeLa nuclear extract are uncapped until they are elongated further. In addition, full-length reovirus transcripts containing 5'-terminal ppGpC or p(NH)ppGpC can be synthesized in incubation mixtures that contain S-adenosylhomocysteine (7) or the non-hydrolyzable I,-yimido analog in place of GTP (8).These diverse observations encouraged us to test the effect of blocking methylation and 5' guanylylation on specific initiation and runoff transcript formation by RNA polymerase II in HeLa whole-cell lysate. Although we confirmed that 0.5 mM S-adenosylhomocysteine inhibits runoff transcript synthesis, >95% of the fulllength adenovirus 2 products made in the presence of the inhibitor contained 5'-terminal GpppA, demonstrating that accurate initiation and generation of runoff transcripts can proceed in the absence of methylation. Guanylylation ...