Post-translational protein arginylation is essential for cardiovascular development and angiogenesis in mice and is mediated by arginyl-transfer RNA-protein transferases Ate1—a functionally conserved but poorly understood class of enzymes. Here, we used sequence analysis to detect the evolutionary relationship between the Ate1 family and bacterial FemABX family of aminoacyl-tRNA-peptide transferases, and to predict the functionally important residues in arginyltransferases, which were then used to construct a panel of mutants for further molecular dissection of mouse Ate1. Point mutations of the residues in the predicted regions of functional importance resulted in changes in enzymatic activity, including complete inactivation of mouse Ate1; other mutations altered its substrate specificity. Our results provide the first insights into the mechanisms of Ate1-mediated arginyl transfer reaction and substrate recognition, and define a new protein superfamily called Dupli-GNAT to reflect its origin by the duplication of the GNAT acetyltransferase domain.