Many flaviviruses are globally important human pathogens. Their plus-strand RNA genome contains a 5'-cap structure that is methylated at the guanine N-7 and the ribose 2'-OH positions of the first transcribed nucleotide, adenine (m(7)GpppAm). Using West Nile virus (WNV), we demonstrate, for the first time, that the nonstructural protein 5 (NS5) mediates both guanine N-7 and ribose 2'-O methylations and therefore is essential for flavivirus 5'-cap formation. We show that a recombinant full-length and a truncated NS5 protein containing the methyltransferase (MTase) domain methylates GpppA-capped and m(7)GpppA-capped RNAs to m(7)GpppAm-RNA, using S-adenosylmethionine as a methyl donor. Furthermore, methylation of GpppA-capped RNA sequentially yielded m(7)GpppA- and m(7)GpppAm-RNA products, indicating that guanine N-7 precedes ribose 2'-O methylation. Mutagenesis of a K(61)-D(146)-K(182)-E(218) tetrad conserved in other cellular and viral MTases suggests that NS5 requires distinct amino acids for its N-7 and 2'-O MTase activities. The entire K(61)-D(146)-K(182)-E(218) motif is essential for 2'-O MTase activity, whereas N-7 MTase activity requires only D(146). The other three amino acids facilitate, but are not essential for, guanine N-7 methylation. Amino acid substitutions within the K(61)-D(146)-K(182)-E(218) motif in a WNV luciferase-reporting replicon significantly reduced or abolished viral replication in cells. Additionally, the mutant MTase-mediated replication defect could not be trans complemented by a wild-type replicase complex. These findings demonstrate a critical role for the flavivirus MTase in viral reproduction and underscore this domain as a potential target for antiviral therapy.