Previous deletion mutagenesis studies have shown that the flavivirus NS1-NS2A clevage requires the eight C-terminal residues of NS1, constituting the cleavage recognition sequence, and sequences in NS2A far downstream of the cleavage site. We now demonstrate that replacement of all of NS1 upstream of the cleavage recognition sequence with prM sequences still allows cleavage in vivo. Thus, other than the eight C-terminal residues, NS1 is dispensable for NS1-NS2A cleavage. However, deletion of the N-terminal signal sequence abrogated cleavage, suggesting that entry into the exocytic pathway is required. Cleavage in vivo was not blocked by brefeldin A, and cleavage could occur in vitro in the presence of dog pancreas microsomes, indicating that NS1-NS2A cleavage occurs in the endoplasmic reticulum. Four in-frame deletions in NS2A were cleavage defective in vitro, as were two mutants in which NS4A-NS4B sequences were substituted for NS2A, suggesting that most of NS2A is required. A series of substitution mutants were constructed in which all Asp, Cys, Glu, His, and Ser residues in NS2A were collectively replaced; all standard proteases require at least one of these residues in their active sites. No single mutant was cleavage defective, suggesting that NS2A is not a protease. Fractionation of the microsomes indicated that the lumenal contents were not required for NS1-NS2A cleavage. It seems most likely that NS1-NS2A cleavage is effected by a host membrane-bound endoplasmic reticulum-resident protease, quite possibly signalase, and that NS2A is required to present the cleavage recognition sequence in the correct conformation to the host enzyme for cleavage.