The large hepatitis delta antigen (HDAg-L) mediates hepatitis delta virus (HDV) assembly and inhibits HDV RNA replication. Farnesylation of the cysteine residue within the HDAg-L carboxyl terminus is required for both functions. Here, HDAg-L proteins from different HDV genotypes and genotype chimeric proteins were analyzed for their ability to incorporate into virus-like particles (VLPs). Observed differences in efficiency of VLP incorporation could be attributed to genotype-specific differences within the HDAg-L carboxyl terminus. Using a novel assay to quantify the extent of HDAg-L farnesylation, we found that genotype 3 HDAg-L was inefficiently farnesylated when expressed in the absence of the small hepatitis delta antigen (HDAg-S). However, as the intracellular ratio of HDAg-S to HDAg-L was increased, so too was the extent of HDAg-L farnesylation for all three genotypes. Single point mutations within the carboxyl terminus of HDAg-L were screened, and three mutants that severely inhibited assembly without affecting farnesylation were identified. The observed assembly defects persisted under conditions where the mutants were known to have access to the site of VLP assembly. Therefore, the corresponding residues within the wild-type protein are likely required for direct interaction with viral envelope proteins. Finally, it was observed that when HDAg-S was artificially myristoylated, it could efficiently inhibit HDV RNA replication. Hence, a general association with membranes enables HDAg to inhibit replication. In contrast, although myristoylated HDAg-S was incorporated into VLPs far more efficiently than HDAg-S or nonfarnesylated HDAg-L, it was incorporated far less efficiently than wild-type HDAg-L; thus, farnesylation was required for efficient assembly.Hepatitis delta virus (HDV) is a subviral agent that possesses a closed circular single-stranded RNA genome of approximately 1.7 kilobases (27, 28). Due to extensive internal complementarity, the HDV genome assumes a partially double-stranded unbranched rod-like structure (5, 16). HDV is a satellite of hepatitis B virus (HBV) and requires the HBV envelope proteins, or surface antigens (HBsAg), for virion assembly (28). HDV virions possess an inner core composed of HDV RNPs and an outer envelope composed of host lipids and HBsAg proteins. HDV encodes two core proteins, the small and large hepatitis delta antigens (HDAg-S and HDAg-L), from a single coding sequence (33). HDAg-S is expressed early during infection and is required for HDV RNA replication (15). HDAg-L is produced later during infection, inhibits HDV RNA replication in a potent trans-dominant manner, and is required for HDV assembly through its interaction with HBsAg (8, 9, 12). In addition, HDAg-L can also be incorporated into the so-called empty particles derived from HBsAg-S, giving rise to virus-like particles (VLPs) devoid of HDV or HBV nucleic acids (32).HDAg-L expression occurs after a host-mediated RNA editing event causes mutation of the HDAg-S UAG (amber) stop codon to a UGG (tryptophan)...