The sequences responsible for binding rotavirus glycoprotein VP7 to the membrane of the endoplasmic reticulum (ER) have not been identified. Here we show that the sequences which promote membrane binding in vitro are distinct from the N-terminal sequences which promote retention of VP7 in the ER in vivo. The role of the C-terminal region in membrane binding was also examined by using truncation mutants. Membrane binding in vitro was reduced but not abolished by removing up to 102 residues from the C terminus. The data suggest that the last 36 residues of VP7 may be present in the membrane or translocation pore, possibly with the C terminus protruding into the cytoplasm, since these residues contribute to, but do not account for, membrane binding. Surprisingly, modified forms of VP7 which are secreted from transfected cells showed the same membrane-binding properties in vitro as the protein retained in the ER membrane. Thus, secreted VP7 may not be present as a soluble polypeptide in the ER. A model to explain these results is presented. Previously published data are consistent with the idea that the highly conserved C terminus of nascent VP7 could have a cytoplasmic orientation which is important for assembly of mature virus particles.