Orthomyxo- and bunyaviruses steal the 5' cap portion of host RNAs to prime their own transcription in a process called "cap snatching." We report that RNA modification of the cap portion by host 2'-O-ribose methyltransferase 1 (MTr1) is essential for the initiation of influenza A and B virus replication, but not for other cap-snatching viruses. We identified with in silico compound screening and functional analysis a derivative of a natural product from Streptomyces, called trifluoromethyl-tubercidin (TFMT), that inhibits MTr1 through interaction at its S-adenosyl-l-methionine binding pocket to restrict influenza virus replication. Mechanistically, TFMT impairs the association of host cap RNAs with the viral polymerase basic protein 2 subunit in human lung explants and in vivo in mice. TFMT acts synergistically with approved anti-influenza drugs.