Plaque formation in vaccinia virus is inhibited by the compound N1-isonicotinoyl-N2-3-methyl-4-chlorobenzoylhydrazine (IMCBH). We have isolated a mutant virus that forms wild-type plaques in the presence of the drug. Comparison of wild-type and mutant virus showed that both viruses produced similar amounts of infectious intracellular naked virus in the presence of the drug. In contrast to the mutant, no extracellular enveloped virus was obtained from IMCBH-treated cells infected with wild-type virus. Marker rescue experiments were used to map the mutation conferring IMCBH resistance to the mutant virus. The map position coincided with that of the gene encoding the viral envelope antigen of M(r) 37,000. Sequence analysis of both wild-type and mutant genes showed a single nucleotide change (G to T) in the mutant gene. In the deduced amino acid sequence, the mutation changes the codon for an acidic Asp residue in the wild-type gene to one for a polar noncharged Tyr residue in the mutant.