MnmC catalyses the last two steps in the biosynthesis of 5-methylaminomethyl-2-thiouridine (mnm(5)s(2)U) in tRNA. Previously, we reported that this bifunctional enzyme is encoded by the yfcK open reading frame in the Escherichia coli K12 genome. However, the mechanism of its activity, in particular the potential structural and functional dependence of the domains responsible for catalyzing the two modification reactions, remains unknown. With the aid of the protein fold-recognition method, we constructed a structural model of MnmC in complex with the ligands and target nucleosides and studied the role of individual amino acids and entire domains by site-directed and deletion mutagenesis, respectively. We found out that the N-terminal domain contains residues responsible for binding of the S-adenosylmethionine cofactor and catalyzing the methylation of nm(5)s(2)U to form mnm(5)s(2)U, while the C-terminal domain contains residues responsible for binding of the FAD cofactor. Further, point mutants with compromised activity of either domain can complement each other to restore a fully functional enzyme. Thus, in the conserved fusion protein MnmC, the individual domains retain independence as enzymes. Interestingly, the N-terminal domain is capable of independent folding, while the isolated C-terminal domain is incapable of folding on its own, a situation similar to the one reported recently for the rRNA modification enzyme RsmC.