Hepatitis C virus C, E1, E2 and p7 proteins are cleaved from a viral polyprotein by host signal peptidases. Cleavage at the E2/p7 site is incomplete in genotype 1a strain H (resulting in E2, p7 and E2p7 species), although it has been reported to be more efficient in genotype 1b strain BK. Here, the proteolytic processing and transmembrane topology of genotype 1a strain H77c p7 was investigated when expressed in the context of E2p7. Partial processing was seen at the E2/p7 site in mammalian cells, the efficiency of which improved in the presence of nucleotide sequences downstream of p7. In insect cells, no processing at the E2/p7 site occurred and the uncleaved E2p7 species was incorporated into virus-like particles when expressed in the context of CE1E2p7c-myc. E2p7c-myc formed a heterodimer with E1, indicating that, like the well-characterized E1-E2 complex, the E1-E2p7 heterodimer may also play a functional role in virus replication. Comparison of the p7 signal peptide sequences of strains BK and H77c revealed 3 aa differences (positions 720, 733 and 742). Mutational analysis showed that the V720L change in the H77c sequence substantially increased processivity at the E2/p7 site. The p7 protein adopts a double membrane-spanning topology with both its N and C termini orientated luminally in the endoplasmic reticulum. The transmembrane topology of E2p7 species was examined by two independent means. In both cases, the C terminus of p7 in E2p7 was found to be cytoplasmically orientated, indicating that p7 adopts a dual transmembrane topology.