mRNAs are regulated by nucleotide modifications that influence their cellular fate. Two of the most abundant modified nucleotides are N6-methyladenosine (m6A), found within mRNAs, and N6,2'-O-dimethyladenosine (m6Am), which is found at the first transcribed nucleotide. Distinguishing these modifications in mapping studies has been difficult. Here, we identify and biochemically characterize PCIF1, the methyltransferase that generates m6Am. We find that PCIF1 binds and is dependent on the m7G cap. By depleting PCIF1, we generated transcriptome-wide maps that distinguish m6Am and m6A. We find that m6A and m6Am misannotations arise from mRNA isoforms with alternative transcription start sites (TSSs). These isoforms contain m6Am that maps to "internal" sites, increasing the likelihood of misannotation. We find that depleting PCIF1 does not substantially affect mRNA translation but is associated with reduced stability of a subset of m6Am-annotated mRNAs. The discovery of PCIF1 and our accurate mapping technique will facilitate future studies to characterize m6Am's function.