The 5'-cap structure is a distinct feature of eukaryotic mRNAs, and eukaryotic viruses generally modify the 5'-end of viral RNAs to mimic cellular mRNA structure, which is important for RNA stability, protein translation and viral immune escape. SARS coronavirus (SARS-CoV) encodes two S-adenosyl-L-methionine (SAM)-dependent methyltransferases (MTase) which sequentially methylate the RNA cap at guanosine-N7 and ribose 2'-O positions, catalyzed by nsp14 N7-MTase and nsp16 2'-O-MTase, respectively. A unique feature for SARS-CoV is that nsp16 requires non-structural protein nsp10 as a stimulatory factor to execute its MTase activity. Here we report the biochemical characterization of SARS-CoV 2'-O-MTase and the crystal structure of nsp16/nsp10 complex bound with methyl donor SAM. We found that SARS-CoV nsp16 MTase methylated m7GpppA-RNA but not m7GpppG-RNA, which is in contrast with nsp14 MTase that functions in a sequence-independent manner. We demonstrated that nsp10 is required for nsp16 to bind both m7GpppA-RNA substrate and SAM cofactor. Structural analysis revealed that nsp16 possesses the canonical scaffold of MTase and associates with nsp10 at 1∶1 ratio. The structure of the nsp16/nsp10 interaction interface shows that nsp10 may stabilize the SAM-binding pocket and extend the substrate RNA-binding groove of nsp16, consistent with the findings in biochemical assays. These results suggest that nsp16/nsp10 interface may represent a better drug target than the viral MTase active site for developing highly specific anti-coronavirus drugs.