Internal bases in mRNA can be subjected to modifications that influence the fate of mRNA in cells. One of the most prevalent modified bases is found at the 5′ end of mRNA, at the first encoded nucleotide adjacent to the 7-methylguanosine cap. Here we show that this nucleotide, N6,2′-O-dimethyladenosine (m6Am), is a reversible modification that influences cellular mRNA fate. Using a transcriptome-wide map of m6Am we find that m6Am-initiated transcripts are markedly more stable than mRNAs that begin with other nucleotides. We show that the enhanced stability of m6Am-initiated transcripts is due to resistance to the mRNA-decapping enzyme DCP2. Moreover, we find that m6Am is selectively demethylated by fat mass and obesity-associated protein (FTO). FTO preferentially demethylates m6Am rather than N6-methyladenosine (m6A), and reduces the stability of m6Am mRNAs. Together, these findings show that the methylation status of m6Am in the 5′ cap is a dynamic and reversible epitranscriptomic modification that determines mRNA stability. Fat mass and obesity-associated protein (FTO) preferentially demethylates m6Am, a modified adenosine that, when present at the 5′ end of certain mRNAs, positively influences mRNA stability by preventing DCP2-mediated decapping. Recent studies have highlighted the role of reversible modifications, such as the addition of a methyl group to adenosines (m6A), on RNA function. Samie Jaffrey and colleagues show that a dimethyl-modified base (m6Am) at the 5′ end of certain mRNAs, next to the 7-methylguanosine cap structure, can positively influence mRNA stability by preventing their DCP2-mediated decapping. This modification is itself regulated by the fat mass and obesity-associated protein FTO, a demethylase that exhibits a preference for m6Am over m6A. This work provides insight into the biological importance of FTO, which has been implicated in body weight regulation.