The human tRNA m(5)C methyltransferase is a potential target for anticancer drugs because it is a novel downstream target of the proto-oncogene myc, mediating Myc-induced cell proliferation. Sequence comparisons of RNA m(5)C methyltransferases indicate that the eukaryotic enzymes possess, in addition to a conserved catalytic domain, a large characteristic carboxyl-terminal extension. To gain insight into the function of this additional domain, the modular architecture of the yeast tRNA m(5)C methyltransferase orthologue, Trm4p, was studied. The yeast enzyme catalyzes the transfer of a methyl group from S-adenosyl-L-methionine to carbon 5 of cytosine at different positions depending on the tRNAs. By limited proteolysis, Trm4p was shown to be composed of two domains that have been separately produced and purified. Here we demonstrate that the aminoterminal domain, encompassing the active site, binds tRNA with similar affinity as the whole enzyme but shows low catalytic efficiency. The carboxyl-terminal domain displays only weak affinity for tRNA. It is not required for m(5)C formation and does not appear to contribute to substrate specificity. However, it enhances considerably the catalytic efficiency of the amino-terminal domain.