During a unique morphogenetic process, rotaviruses obtain a transient membrane envelope when newly synthesized subviral particles bud into the endoplasmic reticulum (ER). As rotavirus particles mature, they lose their transient membrane and a layer of the glycoprotein VP7 forms the virion outer capsid shell. The nonstructural glycoprotein NSP4 functions as an intracellular receptor in the ER membrane (K. S. Au, W. K. Chan, J. W. Burns, and M. K. Estes, J. Virol. 63:4553-4562, 1989), and it has been hypothesized that NSP4 is involved in the removal of the envelope during viral morphogenesis (M. K. Estes and J. Cohen, Microbiol. Rev. 53:410-449, 1989; B. L. Petrie, M. K. Estes, and D. Y. Graham, J. Virol. 46:270-274, 1983). The purpose of the present study was to determine if NSP4 has a direct membrane destabilization activity (MDA) by using liposome leakage assays and electron microscopic visualization of liposome, microsome, and viral envelope disruption. The fluorescent marker (calcein) incorporated into liposomes was released when the liposomes were incubated with purified NSP4. A region corresponding to amino acid residues 114 to 135 of NSP4 also released calcein from liposomes. NSP4(114-135) peptide-specific antibody completely blocked the MDA of the purified NSP4 protein. These results suggest that this region contains at least part of the functional domain of NSP4. Liposomes composed of phosphatidylcholine and microsomes (to simulate ER membranes) were broken when observed by electron microscopy after incubation with NSP4 or the NSP4(114-135) peptide. In contrast, the envelope of Sendai virus, which is derived from cytoplasmic membranes, and erythrocytes were not disrupted by NSP4 and the NSP4(114-135) peptide. These results provide direct evidence that NSP4 possesses MDA and suggest that it can cause ER membrane damage. Therefore, NSP4 might play an important role in the removal of the transient envelope from budding particles during viral morphogenesis. A model for the MDA of NSP4 in viral morphogenesis is proposed.