The major envelope antigen of vaccinia virus is an acylated protein of M(r) 37,000 (p37K) which is required for the formation of extracellular enveloped virions (EEV). Despite its important role in the wrapping process, p37K has not been studied in much detail. In order to better characterize this protein we have undertaken a detailed biochemical analysis. Sodium carbonate treatment showed that p37K is tightly bound to the viral envelope. Its resistance to proteinase K digestion indicates that it is not exposed on the surface of EEV but lines the inner side of the envelope. Since p37K does not contain a signal peptide characteristic of most membrane proteins, we examined the possibility that the protein acquires its membrane affinity through the addition of fatty acids. Indeed, Triton X-114 phase partitioning experiments demonstrated that p37K is hydrophobic when acylated, but hydrophilic in the absence of fatty acids. Three other viral proteins have been shown to be required for virus envelopment and release from the host cell and we therefore tested whether p37K interacts with viral proteins. In EEV and in absence of reducing agents, an 80-kDa complex reacting with an anti-37K antiserum was found. Analysis of this complex showed that it most likely consists of a p37K homodimer. Interestingly, only a small amount of p37K occurs as a complex, most of it is present in the viral envelope as monomers.