Recent studies identified signal peptidase complex subunit 1 (SPCS1) as a proviral host factor for Flaviviridae viruses, including HCV. One of the SPCS1's roles in flavivirus propagation was attributed to its regulation of signal peptidase complex (SPC)-mediated processing of flavivirus polyprotein, especially C-prM junction. However, whether SPCS1 also regulates any SPC-mediated processing sites within HCV polyprotein remains unclear. In this study, we determined that loss of SPCS1 specifically impairs the HCV E2-p7 processing by the SPC. We also determined that efficient separation of E2 and p7, regardless of its dependence on SPC-mediated processing, leads to SPCS1 dispensable for HCV assembly These results suggest that SPCS1 regulates HCV assembly by facilitating the SPC-mediated processing of E2-p7 precursor. Structural modeling suggests that intrinsically delayed processing of the E2-p7 is likely caused by the structural rigidity of p7 N-terminal transmembrane helix-1 (p7/TM1/helix-1), which has mostly maintained membrane-embedded conformations during molecular dynamics (MD) simulations. E2-p7-processing-impairing p7 mutations narrowed the p7/TM1/helix-1 bending angle against the membrane, resulting in closer membrane embedment of the p7/TM1/helix-1 and less access of E2-p7 junction substrate to the catalytic site of the SPC, located well above the membrane in the ER lumen. Based on these results we propose that the key mechanism of action of SPCS1 in HCV assembly is to facilitate the E2-p7 processing by enhancing the E2-p7 junction site presentation to the SPC active site. By providing evidence that SPCS1 facilitates HCV assembly by regulating SPC-mediated cleavage of E2-p7 junction, equivalent to the previously established role of this protein in C-prM junction processing in flavivirus, this study establishes the common role of SPCS1 in Flaviviridae family virus propagation as to exquisitely regulate the SPC-mediated processing of specific, suboptimal target sites.