Capping is targeted to pre-mRNAs through binding of the guanylyltransferase component of the capping apparatus to the phosphorylated CTD of RNA polymerase II. We report that mammalian guanylyltransferase binds synthetic CTD peptides containing phosphoserine at either position 2 or 5 of the YSPTSPS heptad repeat. CTD peptides containing Ser-5-PO4 stimulate guanylyltransferase activity by enhancing enzyme affinity for GTP and increasing the yield of the enzyme-GMP intermediate. A CTD peptide containing Ser-2-PO4 has no effect on guanylyltransferase activity. This implies an allosteric change in guanylyltransferase conformation that is specified by the position of phosphoserine in the CTD. Stimulation of guanylyltransferase increases with the number of Ser-5-phosphorylated heptads. Our results underscore how mRNA production may be regulated by the display of different CTD phosphorylation arrays during transcription elongation.