The Rubella virus capsid protein is phosphorylated prior to virus assembly. Our previous data are consistent with a model in which dynamic phosphorylation of the capsid regulates its RNA binding activity and, in turn, nucleocapsid assembly. In the present study, the process of capsid phosphorylation was examined in further detail. We show that phosphorylation of serine 46 in the RNA binding region of the capsid is required to trigger phosphorylation of additional amino acid residues that include threonine 47. This residue likely plays a direct role in regulating the binding of genomic RNA to the capsid. We also provide evidence which suggests that the capsid is dephosphorylated prior to or during virus budding. Finally, whereas the phosphorylation state of the capsid does not directly influence the rate of synthesis of viral RNA and proteins or the assembly and secretion of virions, the presence of phosphate on the capsid is critical for early events in virus replication, most likely the uncoating of virions and/or disassembly of nucleocapsids.