Mouse hepatitis virus (MHV) is a member of the family Coronaviridae. These positive strand RNA viruses encode a replicase polyprotein that is processed into 16 nonstructural proteins (nsps). The nsps assemble with membranes to generate double membrane vesicles, which are the sites of viral RNA synthesis. MHV nsp3 contains multiple domains including two papain-like protease domains, PLP1 and PLP2, and a predicted transmembrane (TM) domain. In this study, we determined the membrane topology of nsp3-TM and showed that TM-mediated tethering of PLP2 is important for processing at cleavage site 3. Biochemical analysis revealed that nsp3 is an integral membrane protein that is inserted into the endoplasmic reticulum (ER) membranes co-translationally and glycosylated at asparagine-2357. Proteinase K digestion experiments indicate that the TM domain of nsp3 has 4 membrane-spanning helices. We show that nsp3-TM is sufficient in mediating ER membrane association of a cytosolic protein. This study is the first detailed analysis of the topology and function of the coronavirus nsp3 TM domain.