Glycoproteins M and N (gM and gN, respectively) are among the few proteins that are conserved across the herpesvirus family. The function of the complex is largely unknown. Whereas deletion from most alphaherpesviruses has marginal effects on the replication of the respective viruses, both proteins are essential for replication of human cytomegalovirus (HCMV). We have constructed a series of mutants in gN to study the function of this protein. gN of HCMV is a type I glycoprotein containing a short carboxy-terminal domain of 14 amino acids, including two cysteine residues directly adjacent to the predicted transmembrane anchor at positions 125 and 126. Deletion of the entire carboxy-terminal domain as well as substitution with the corresponding region from alpha herpesviruses or mutations of both cysteine residues resulted in a replication-incompetent virus. Recombinant viruses containing point mutations of either cysteine residue could be generated. These viruses were profoundly defective for replication. Complex formation of the mutant gNs with gM and transport of the complex to the viral assembly compartment appeared unaltered compared to the wild type. However, in infected cells, large numbers of capsids accumulated in the cytoplasm that failed to acquire an envelope. Transiently expressed gN was shown to be modified by palmitic acid at both cysteine residues. In summary, our data suggest that the carboxy-terminal domain of gN plays a critical role in secondary envelopment of HCMV and that palmitoylation of gN appears to be essential for function in secondary envelopment of HCMV and virus replication. Copyright © 2007, American Society for Microbiology. All Rights Reserved.