Abstract Ribosomes are intricate molecular machines ensuring proper protein synthesis in every cell. Ribosome biogenesis is a complex process which has been intensively analyzed in bacteria and eukaryotes. In contrast, our understanding of the in vivo archaeal ribosome biogenesis pathway remains less characterized. Here, we have analyzed the in vivo role of the almost universally conserved ribosomal RNA dimethyltransferase KsgA/Dim1 homolog in archaea. Our study reveals that KsgA/Dim1-dependent 16S rRNA dimethylation is dispensable for the cellular growth of phylogenetically distant archaea. However, proteomics and functional analyses suggest that archaeal KsgA/Dim1 and its rRNA modification activity (i) influence the expression of a subset of proteins and (ii) contribute to archaeal cellular fitness and adaptation. In addition, our study reveals an unexpected KsgA/Dim1-dependent variability of rRNA modifications within the archaeal phylum. Combining structure-based functional studies across evolutionary divergent organisms, we provide evidence on how rRNA structure sequence variability (re-)shapes the KsgA/Dim1-dependent rRNA modification status. Finally, our results suggest an uncoupling between the KsgA/Dim1-dependent rRNA modification completion and its release from the nascent small ribosomal subunit. Collectively, our study provides additional understandings into principles of molecular functional adaptation, and further evolutionary and mechanistic insights into an almost universally conserved step of ribosome synthesis.