The myxoma virus M063R gene product exhibits some sequence similarity to the poxvirus host range gene, C7L, of vaccinia virus. To address the potential host range function of the M063R gene product in rabbits, a deletion mutant of myxoma virus (vMyx63KO) was generated and characterized. vMyx63KO replicated to normal titre levels and produced foci that were indistinguishable from those produced by MV in vitro in a monkey kidney cell line (BGMK) that are permissive for wild type MV. However, vMyx63KO failed to replicate in all rabbit cell lines tested, including both primary and established cells lines, as well as cells derived from a variety of tissues. M063R expression was not required for myxoma virus binding, entry or early gene expression, whereas DNA replication was aborted and late genes were not expressed in vMyx63KO infected rabbit cells. Thus, the replication block for vMyx63KO in rabbit cells preceded the stage of late gene expression and DNA replication. Finally, an in vivo pathogenesis study indicated that vMyx63KO failed to cause any signs of classic myxomatosis in infected rabbits, but functioned as a non-replicating vaccine and provided protection for subsequent challenge by wild type myxoma virus. Altogether, these observations demonstrate that M063R plays a critical role in determining the host specificity of myxoma virus in rabbit cells.