Papaver somniferum is source for several alkaloids including morphine, codeine, papaverine and sanguinarine. Selection and breeding have produced large number of germplasm and mutants of poppy with modulated biosynthesis and accumulation of specific alkaloids. Comparative transcriptome analysis of these contrasting germplasms may help in elucidating uncharacterized biosynthetic pathways as well as regulatory mechanisms involved in alkaloid biosynthesis. In an attempt to identify biosynthetic steps involved in papaverine, we established transcriptome of wild type and high papaverine synthesizing mutant (pap1) through 454 pyrosequencing. For both transcriptomes, more than 238MB data having at least 7,60,000 expressed sequence tags with an average length of 300 bps were generated. Assembly of these sequences yielded 32,313 and 26,657 contigs with average size of more than 550 bps for pap1 and wild type respectively. Each transcriptome contains approximately 45% large contigs with an average length of 900 bps. Each library was annotated and all the known genes involved in alkaloid biosynthesis were identified. For digital differential expression analysis reads from both libraries were tagged, pooled and assembled. After filtering, 3336 contigs including members of cytochrome P450, glycosyltransferase, and methyltransferases gene families were identified as differentially expressed in both transcriptomes. Chemical structure and enzymatic reaction relationship suggest possible involvement of differentially expressed methyltransferases in papaverine biosynthesis in pap1 mutant. Out of total 410 contigs related to methyltransferase, 66 were differentially expressed in pap1 mutant with respect to wild type. Study suggests that identified methyltransferases might be responsible for papaverine biosynthesis in poppy.