Acquisition of the 5'cap is the earliest modification event during eukaryotic mRNA synthesis. The cap is thought to facilitate later processing steps, such as pre-mRNA splicing. If this is so, then a defect in cap synthesis should impact on splicing in vivo. We tested this hypothesis by examining the consequences of conditional inactivation of the Saccharomyces cerevisiae CEG1 gene, which encodes mRNA guanylyltransferase (capping enzyme). Two different ceg1-ts mutants, Y66A and C354Y, displayed a pre-mRNA processing (prp) defect, characterized by an increase in the amount of unspliced pre-mRNA after shift to nonpermissive temperature and a decrease in the amount of mature mRNA. The guanylyltransferase activities of the Y66A and C354Y proteins were thermolabile, suggesting that defective capping in vivo was contributory to the prp phenotype. Although these results provide the first genetic link between capping and splicing in vivo, we were unable to demonstrate a role for either the cap or the capping enzyme during yeast pre-mRNA splicing in vitro.