Posttranslational processing and subcellular localization of the HCV core protein are critical steps involved in the assembly of hepatitis C virus (HCV). In this study, both of these events were investigated by in vitro translation and transient COS-1 cell transfection of core protein expression constructs. Mutations at amino acid residues 173 to 174 and 191 to 192 disrupted processing events at the two putative cleavage sites in the C-terminal hydrophobic region of the core protein, indicating that these residues are implicated in the pathway of core protein maturation. As a result, two forms of core protein, C173 and C191, were detected by immunoblotting. Indirect immunofluorescence experiments showed that core proteins C173 and C191, when produced from HCV full-length protein or various polyprotein precursors, displayed a cytoplasmic localization. The C173 species, however, was translocated to the nucleus when expressed in the absence of C191. These findings indicate that preferential cleavage may occur during core protein maturation and that the association of the C191 with the C173 species may contribute to the distinct subcellular distribution of core protein. This may provide a possible mechanism for the control of the diverse biological functions of core protein during HCV replication and assembly.