Cleavage at the 2/3 site of hepatitis C virus (HCV) is thought to be mediated by a virus-encoded protease composed of the region of the polyprotein encoding NS2 and the N-terminal one-third of NS3. This protease is distinct from the NS3 serine protease, which is responsible for downstream cleavages in the nonstructural region. Site-directed mutagenesis of residues surrounding the 2/3 cleavage site showed that cleavage is remarkably resistant to single-amino-acid substitutions from P5 to P3' (GWRLL decreases API). The only mutations which dramatically inhibited cleavage were the ones most likely to alter the conformation of the region, such as Pro substitutions at the P1 or P1' position, deletion of both amino acids at P1 and P1', or simultaneous substitution of multiple Ala residues. Cotransfection experiments were done to provide additional information on the polypeptide requirements for bimolecular cleavage. Polypeptides used in these experiments contained amino acid substitutions and/or deletions in NS2 and/or the N-terminal one-third of NS3. Polypeptides with defects in either NS2 or the N-terminal portion of NS3 but not both were cleaved when cotransfected with constructs expressing intact versions of the defective region. Cotransfection experiments also showed that certain defective NS2-3 constructs partially inhibited cleavage of wild-type polypeptides. Although these results show that inefficient cleavage can occur in a bimolecular reaction, they suggest that both molecules must contribute a functional subunit to allow formation of a protease which is capable of cleavage at the 2/3 site. This reaction may resemble the cis cleavage thought to occur at the 2/3 site during processing of the wild-type HCV polyprotein.