Envelopment of Sindbis virus at the plasma membrane is a multistep process in which an initial step is the association of the E2 protein via a cytoplasmic endodomain with the preassembled nucleocapsid. Sindbis virus is vectored in nature by blood-sucking insects and grows efficiently in a number of avian and mammalian vertebrate hosts. The assembly of Sindbis virus, therefore, must occur in two very different host cell environments. Mammalian cells contain cholesterol which insect membranes lack. This difference in membrane composition may be critical in determining what requirements are placed on the E2 tail for virus assembly. To examine the interaction between the E2 tail and the nucleocapsid in Sindbis virus, we have produced substitutions and deletions in a region of the E2 tail (E2 amino acids 408 to 415) that is initially integrated into the endoplasmic reticulum. This sequence was identified as being critical for nucleocapsid binding in an in vitro peptide protection assay. The effects of these mutations on virus assembly and function were determined in both vertebrate and invertebrate cells. Amino acid substitutions (at positions E2: 408, 410, 411, and 413) reduced infectious virus production in a position-dependent fashion but were not efficient in disrupting assembly in mammalian cells. Deletions in the E2 endodomain (delta406-407, delta409-411, and delta414-417) resulted in the failure to assemble virions in mammalian cells. Electron microscopy of BHK cells transfected with these mutants revealed assembly of nucleocapsids that failed to attach to membranes. However, introduction of these deletion mutants into insect cells resulted in the assembly of virus-like particles but no assayable infectivity. These data help define protein interactions critical for virus assembly and suggest a fundamental difference between Sindbis virus assembly in mammalian and insect cells.