Baculoviruses are enveloped insect viruses that can carry large quantities of foreign DNA in their genome. Baculoviruses have proved to be very promising gene therapy vectors but little is known about their transduction mechanisms in mammalian cells. We show in this study that Autographa californica multiple nuclear polyhedrosis virus capsid is compatible with the incorporation of desired proteins in large quantities. Fusions can be made to the N-terminus or C-terminus of the major capsid protein vp39 without compromising the viral titer or functionality. As an example of the baculovirus capsid display we show a tracking of the baculovirus transduction in mammalian cells by an enhanced green fluorescent protein (EGFP)-displaying virus. Our confocal and electron microscopy results suggest that the transduction block in mammalian cells is not in the endosomal escape, as previously proposed, but rather in the cytoplasmic transport or nuclear entry of the virus capsid. Our results also suggest that the EGFP-tagged virus can be used for visualization of the virus biodistribution in vivo. Furthermore, capsid-modified baculoviruses hold great promise for the nuclear and subcellular targeting of transgenes and as a novel peptide display system for a variety of eukaryotic applications.