We have cloned and sequenced the L3 genome segment of avian reovirus strain 1733, which specifies the viral guanylyltransferase protein, lambdaC. The L3 gene is 3907 nucleotides long and encodes, in a single large open-reading frame, a polypeptide of 1285 amino acid residues, with a calculated M(r) of 142.2 kDa. Expression of this gene in a baculovirus/insect cell system produced a recombinant protein that comigrated with reovirion lambdaC and reacted with anti-reovirus polyclonal serum in a Western blot assay. Incubation of recombinant lambdaC with GTP led to the formation GMP-lambdaC complex via a phosphoamide linkage. Interestingly, a 42-kDa amino-terminal proteolytic fragment of recombinant lambdaC protein also exhibited autoguanylylation activity, demonstrating both that this fragment is necessary and sufficient for autoguanylylation activity and that the 100-kDa complementary fragment is expendable for that activity. Comparison of the deduced amino acid sequence of protein lambdaC with those of the mammalian and grass carp reovirus guanylyltransferases revealed that only two of eight lysine residues within the amino-terminal 42-kDa region are conserved. Interestingly, these two lysines match with the lysine residues in the mammalian reovirus capping enzyme proposed to be essential for autoguanylylation activity. Our alignment analysis also showed that the S-adenosyl-l-methionine-binding pocket previously detected in the mammalian reovirus capping enzyme is fully conserved in its avian and grass carp reovirus counterparts, suggesting that all three enzymes have methylase activity.