The Leishmania RNA virus 1-4 capsid protein possesses an endoribonuclease activity responsible for single-site-specific cleavage within the 450-nucleotide 5 untranslated region of its own viral RNA transcript. To characterize the minimal essential RNA determinants required for site-specific cleavage, mutated RNA transcripts were examined for susceptibility to cleavage by the virus capsid protein in an in vitro assay. Deletion analyses revealed that all determinants necessary for accurate cleavage are encoded in viral nucleotides 249 to 342. Nuclease mapping and site-specific mutagenesis of the minimal RNA sequence defined a stem-loop structure that is located 40 nucleotides upstream from the cleavage site (nucleotide 320) and that is essential for accurate RNA cleavage. Abrogation of cleavage by disruption of base pairing within the stem-loop was reversed through the introduction of complementary nucleotide substitutions that reestablished the structure. We also provide evidence that divalent cations, essential components of the cleavage reaction, stabilized the stem-loop structure in solution. That capsid-specific antiserum eliminated specific RNA cleavage provides further evidence that the virus capsid gene encodes the essential endoribonuclease activity.The Leishmania RNA virus (LRV) genome comprises approximately 5.3 kb of double-stranded RNA that encodes two large open reading frames (ORF2 and ORF3) on the positivesense strand in all isolates examined (31,32,35). When expressed by recombinant baculovirus in Spodoptera frugiperda 9 (Sf9) cells, the product of LRV1-4 ORF2 self-assembles into virus-like particles morphologically identical to native virions, demonstrating that ORF2 encodes the major capsid protein (5). Sequence similarities to the RNA-dependent RNA polymerases of other double-stranded and plus-strand RNA viruses further imply that ORF3 encodes the viral RNA-dependent RNA polymerases.Since a short RNA transcript was first identified, both as a product of an in vitro polymerase assay and as a by-product of natural virus infection in Leishmania spp. (8), studies have focused on understanding the nature of this transcript and mapping the precise cleavage site on the full-length RNA substrate. The cleavage site in LRV1-4 RNA was mapped by primer extension (19) to nucleotide 320 of the virus 5Ј untranslated region (UTR). Subsequent gene expression studies identified the LRV1-4 capsid protein as the endoribonuclease responsible for the cleavage event (see references 20 and 21 for a review). As with many other endoribonucleases (10, 11), divalent cations have been shown to be essential for RNA cleavage in LRV (19), although their precise role has not been identified. The original RNA substrate developed for use in the in vitro cleavage assay contains 447 nucleotides derived from the 5Ј UTR of a full-length LRV1-4 transcript (19). Crude boundary mapping subsequently identified a 226-nucleotide RNA fragment that retains all determinants necessary to accurately target cleavage to the wild-type site (18).S...