In bluetongue virus (BTV)-infected cells, large cytoplasmic aggregates are formed, termed viral inclusion bodies (VIBs), which are believed to be the sites of viral replication and morphogenesis. The BTV nonstructural protein NS2 is the major component of VIBs. NS2 undergoes intracellular phosphorylation and possesses a strong single-stranded RNA binding activity. By changing phosphorylated amino acids to alanines and aspartates, we have mapped the phosphorylated sites of NS2 to two serine residues at positions 249 and 259. Since both of these serines are within the context of protein kinase CK2 recognition signals, we have further examined if CK2 is involved in NS2 phosphorylation by both intracellular colocalization and an in vitro phosphorylation assay. In addition, we have utilized the NS2 mutants to determine the role of phosphorylation on NS2 activities. The data obtained demonstrate that NS2 phosphorylation is not necessary either for its RNA binding properties or for its ability to interact with the viral polymerase VP1. However, phosphorylated NS2 exhibited VIB formation while unmodified NS2 failed to assemble as VIBs although smaller oligomeric forms of NS2 were readily formed. Our data reveal that NS2 phosphorylation controls VIBs formation consistent with a model in which NS2 provides the matrix for viral assembly.Protein phosphorylation is a ubiquitous protein modification that controls a number of intracellular processes. In eukaryotic systems, phosphorylation occurs almost exclusively on serine, threonine, or tyrosine residues (26). Also for RNA viruses, including vesicular stomatitis virus, ebola virus, human immunodeficiency virus type 1 (HIV-1), and rubella virus, protein phosphorylation has been shown to regulate vital processes such as virus transcription and replication, RNA binding activity, and virus assembly (9,22,28,34). The nonstructural protein 2 (NS2) is the only phosphorylated protein of the 10 viral proteins synthesized during a bluetongue virus (BTV) infection (25).BTV is the prototype of the Orbivirus genus in the Reoviridae family and hence characteristically possesses a doublestranded RNA genome enclosed by three consecutive capsid layers of multiple proteins. The BTV genome consists of 10 segments, each encoding one protein. There are seven structural proteins (viral polymerase 1 [VP1] through VP7), of which two are outer capsid proteins (VP2 and VP5) and the remaining five are associated with the BTV core. The viral core consists of a double-layered shell composed of VP3 and VP7, and within the core, there are three virus-encoded proteins (VP1, VP4, and VP6), all of which are enzymatically involved in viral transcription and replication. VP4 is the mRNA-capping enzyme, exhibiting guanyltransferase and methyltransferase activities, VP6 is a double-stranded RNA helicase, and the largest protein, VP1, is the viral RNA-dependent RNA polymerase (5,32,36,41). Core particles are transcriptionally active, producing and releasing mRNA. The remaining three BTV proteins are nonstructural...