Processing of dengue virus structural proteins was assessed in vitro. RNA transcripts for cell-free translation were prepared from cloned DNA (dengue virus type 4, strain 814669 genome) encoding capsid, pre-membrane (prM), and the first 23 amino acids of envelope (E). Processing of a 33-kilodalton precursor polypeptide encoded by wild-type RNA transcripts occurred only in the presence of added microsomal membranes. Under these conditions, cleavage at the capsid-prM and prM-E sites and glycosylation of prM occurred in association with translocation. Amino acid sequence analysis confirmed that translation initiated at the predicted N terminus of the capsid and that capsid-prM cleavage occurred at the predicted site for the action of signal peptidase following a candidate signal sequence (hydrophobic residues 100 to 113) in the dengue virus precursor. Mutations were introduced into the dengue virus DNA template by site-directed mutagenesis, altering nucleotide sequences encoding the capsid and the candidate signal for prM. The phenotypes of the mutants were deduced by analysis of the products of cell-free translation of the respective RNA transcripts. The resulting observations confirmed that cleavage at the capsid-prM and prM-E sites is effected entirely by signal peptidase and that the candidate signal is required for translocation.