The structural requirements of the hydrophobic domain contained in poliovirus polypeptide 3AB were studied by using a molecular genetic approach in combination with an in vitro biochemical analysis. We report here the generation and analysis of deletion, insertion, and amino acid replacement mutations aimed at decreasing the hydrophobic character of the domain. Our results indicated that the hydrophobicity of this region of 3AB is necessary to maintain normal viral RNA synthesis. However, in vitro membrane association assays of the mutated proteins did not establish a direct correlation between 3AB membrane association and viral RNA synthesis. Some of the lethal mutations we engineered produced polyproteins with abnormal P2- and P3-processing capabilities due to an alteration in the normal cleavage order of the polyprotein. A detailed analysis of these mutants suggests that P2 is not the major precursor for polypeptides 2A and 2BC and that P2 protein products are derived from P2-P3-containing precursors (most likely P2-P3 or P2-3AB). Such precursors are likely to result from primary polyprotein cleavage events that initiate a proteolytic cascade not previously documented. Our results also indicated that the function provided by the hydrophobic domain of 3AB cannot be provided in trans. We discuss the implications of these results on the formation of limited-diffusion replication complexes as a means of sequestering P2- and P3-region polypeptides required for RNA synthesis and protein processing.