The 7-methylguanosine cap added to the 5' end of mRNA is required for efficient gene expression in eukaryotes. In mammals, methylation of the guanosine cap is catalyzed by RNMT (RNA guanine-7 methyltransferase), an enzyme previously thought to function as a monomer. We have identified an obligate component of the mammalian cap methyltransferase, RAM (RNMT-Activating Mini protein)/Fam103a1, a previously uncharacterized protein. RAM consists of an N-terminal RNMT-activating domain and a C-terminal RNA-binding domain. As monomers RNMT and RAM have a relatively weak affinity for RNA; however, together their RNA affinity is significantly increased. RAM is required for efficient cap methylation in vitro and in vivo, and is indirectly required to maintain mRNA expression levels, for mRNA translation and for cell viability. Our findings demonstrate that RAM is an essential component of the core gene expression machinery.