The methylation of pseudouridine (Ψ) at position 54 of tRNA, producing m(1)Ψ, is a hallmark of many archaeal species, but the specific methylase involved in the formation of this modification had yet to be characterized. A comparative genomics analysis had previously identified COG1901 (DUF358), part of the SPOUT superfamily, as a candidate for this missing methylase family. To test this prediction, the COG1901 encoding gene, HVO_1989, was deleted from the Haloferax volcanii genome. Analyses of modified base contents indicated that while m(1)Ψ was present in tRNA extracted from the wild-type strain, it was absent from tRNA extracted from the mutant strain. Expression of the gene encoding COG1901 from Halobacterium sp. NRC-1, VNG1980C, complemented the m(1)Ψ minus phenotype of the ΔHVO_1989 strain. This in vivo validation was extended with in vitro tests. Using the COG1901 recombinant enzyme from Methanocaldococcus jannaschii (Mj1640), purified enzyme Pus10 from M. jannaschii and full-size tRNA transcripts or TΨ-arm (17-mer) fragments as substrates, the sequential pathway of m(1)Ψ54 formation in Archaea was reconstituted. The methylation reaction is AdoMet dependent. The efficiency of the methylase reaction depended on the identity of the residue at position 55 of the TΨ-loop. The presence of Ψ55 allowed the efficient conversion of Ψ54 to m(1)Ψ54, whereas in the presence of C55, the reaction was rather inefficient and no methylation reaction occurred if a purine was present at this position. These results led to renaming the Archaeal COG1901 members as TrmY proteins.