Rous sarcoma virus nucleocapsid protein (NC) has been shown by site-directed mutagenesis to be involved in viral RNA packaging and in the subsequent maturation of genomic RNA in the progeny viral particles. To investigate whether NC exerts these activities as a free protein or as a domain of the polyprotein precursor Pr76gag, we have constructed several mutants unable to process Pr76gag and analyzed their properties in a transient-transfection assay of chicken embryo fibroblasts, the natural host of Rous sarcoma virus. A point mutation in the protease (PR) active site completely prevents Pr76gag processing. The full-length Pr76gag polyprotein is still able to package viral RNA, but cannot mature it. A shorter gag precursor polyprotein lacking the C-terminal PR domain, but retaining that of the NC protein, is however, unable even to package viral RNA. This indicates that the NC protein can participate in packaging viral RNA only as part of a full-length Pr76gag and that the PR domain is, indirectly or directly, also involved in RNA packaging. These results also demonstrate that processing of Pr76gag is necessary for viral RNA dimerization.