Bacteriophage phi29 is typical of double-stranded DNA viruses in that its genome is packaged into a preformed procapsid during maturation. An intriguing feature of phi29 assembly is that a virus-encoded RNA (pRNA) is required for the packaging of its genomic DNA. Psoralen cross-linking, primer extension, and T1 RNase partial digestion revealed that pRNA had at least two conformations; one was able to bind procapsids, and the other was not. In the presence of Mg2+, one stretch of pRNA, consisting of bases 31 to 35, was confirmed to be proximal to base 69, as revealed by its efficient cross-linking by psoralen. Two cross-linking sites in the helical region were identified. Mg2+ induced a conformational change of pRNA that exposes the portal protein binding site by promoting the refolding of two strands of the procapsid binding region, resulting in the formation of pRNA-procapsid complexes. The procapsid binding region in this binding-competent conformation could not be cross-linked with psoralen. When the two strands of the procapsid binding region were fastened by cross-linking, pRNA could neither bind procapsids nor package phi29 DNA. A pRNA conformational change was also discernible by comparison of migration rates in native EDTA and Mg2+ polyacrylamide gel electrophoresis and was revealed by T1 RNase probing. The Mg2+ concentration required for the detection of a change in pRNA cross-linking patterns was 1 mM, which was the same as that required for pRNA-procapsid complex formation and DNA packaging and was also close to that in normal host cells.