US3 of human cytomegalovirus is an endoplasmic reticulum resident transmembrane glycoprotein that binds to major histocompatibility complex class I molecules and prevents their departure. The endoplasmic reticulum retention signal of the US3 protein is contained in the luminal domain of the protein. To define the endoplasmic reticulum retention sequence in more detail, we have generated a series of deletion and point mutants of the US3 protein. By analyzing the rate of intracellular transport and immunolocalization of the mutants, we have identified Ser58, Glu63, and Lys64 as crucial for retention, suggesting that the retention signal of the US3 protein has a complex spatial arrangement and does not comprise a contiguous sequence of amino acids. We also show that a modified US3 protein with a mutation in any of these amino acids maintains its ability to bind class I molecules; however, such mutated proteins are no longer retained in the endoplasmic reticulum and are not able to block the cell surface expression of class I molecules. These findings indicate that the properties that allow the US3 glycoprotein to be localized in the endoplasmic reticulum and bind major histocompatibility complex class I molecules are located in different parts of the molecule and that the ability of US3 to block antigen presentation is due solely to its ability to retain class I molecules in the endoplasmic reticulum.