Vaccinia virus capping enzyme is a transcription initiation factor

It has previously been demonstrated that vaccinia virus capping enzyme is involved both in the formation of a 5' cap structure and in termination of early transcription. Here we show that capping enzyme has an additional activity which is required for transcription of intermediate genes. VITF-A and VITF-B have been defined as two activities which together with RNA polymerase are necessary and sufficient to transcribe intermediate genes in vitro. VITF-A and the viral capping enzyme are shown to copurify to near homogeneity. Direct evidence that capping enzyme is VITF-A was obtained by complementation of a reconstituted transcription system with viral capping enzyme expressed in Escherichia coli. Although capping enzyme is a cofactor in early transcription termination, intermediate transcription is not terminated in response to the early termination signal. Capping enzyme is shown to form a complex with RNA polymerase in the absence of VITF-B. This appears to be a prerequisite for the formation of a stable initiation complex.