The 5' end of eukaryotic mRNA contains the type-1 (m7GpppNm) or type-2 (m7GpppNmNm) cap structure. Many viruses have evolved various mechanisms to develop their own capping enzymes (e.g. flavivirus and coronavirus) or to 'steal' caps from host mRNAs (e.g. influenza virus). Other viruses have developed 'cap-mimicking' mechanisms by attaching a peptide to the 5' end of viral RNA (e.g. picornavirus and calicivirus) or by having a complex 5' RNA structure (internal ribosome entry site) for translation initiation (e.g. picornavirus, pestivirus and hepacivirus). Here we review the diverse viral RNA capping mechanisms. Using flavivirus as a model, we summarize how a single methyltransferase catalyses two distinct N-7 and 2'-O methylations of viral RNA cap in a sequential manner. For antiviral development, a structural feature unique to the flavivirus methyltransferase was successfully used to design selective inhibitors that block viral methyltransferase without affecting host methyltransferases. Functionally, capping is essential for prevention of triphosphate-triggered innate immune activation; N-7 methylation is critical for enhancement of viral translation; and 2'-O methylation is important for subversion of innate immune response during viral infection. Flaviviruses defective in 2'-O methyltransferase are replicative, but their viral RNAs lack 2'-O methylation and are recognized and eliminated by the host immune response. Such mutant viruses could be rationally designed as live attenuated vaccines. This concept has recently been proved with Japanese encephalitis virus and dengue virus. The findings obtained with flavivirus should be applicable to other RNA viruses.