The distribution and morphology of mitochondria are dramatically affected during infection with rubella virus (RV). Expression of the capsid, in the absence of other viral proteins, was found to induce both perinuclear clustering of mitochondria and the formation of electron-dense intermitochondrial plaques, both hallmarks of RV-infected cells. We previously identified p32, a host cell mitochondrial matrix protein, as a capsid-binding protein. Here, we show that two clusters of arginine residues within capsid are required for stable binding to p32. Mutagenic ablation of the p32-binding site in capsid resulted in decreased mitochondrial clustering, indicating that interactions with this cellular protein are required for capsid-dependent reorganization of mitochondria. Recombinant viruses encoding arginine-to-alanine mutations in the p32-binding region of capsid exhibited altered plaque morphology and replicated to lower titers. Further analysis indicated that disruption of stable interactions between capsid and p32 was associated with decreased production of subgenomic RNA and, consequently, infected cells produced significantly lower amounts of viral structural proteins under these conditions. Together, these results suggest that capsid-p32 interactions are important for nonstructural functions of capsid that include regulation of virus RNA replication and reorganization of mitochondria during infection.