The Sendai virus C proteins, C', C, Y1, and Y2, are a nested set of four independently initiated carboxy-coterminal proteins encoded on the P mRNA from an alternate reading frame. Together the C proteins have been shown to inhibit viral transcription and replication in vivo and in vitro and C' binds the Sendai virus L protein, the presumed catalytic subunit of the viral RNA polymerase. To identify amino acids within the C' protein that are important for binding L, site-directed mutagenesis of the gstC' gene was used to change conserved charged amino acids to alanine, generating nine mutants. Additionally, a tenth natural mutant, gstF170S, was also constructed. Six of the gstC' mutants, primarily in the C-terminal half of C', exhibited a defect in the ability to bind L protein. The mutants were assayed for their effect on in vitro transcription and replication from the antigenomic promoter, and the data suggest in all but one case a direct correlation between the ability of C to bind L and to inhibit these steps in RNA synthesis. Further studies with two nonfusion C mutants showed that this correlation was specifically due to the C' portion, and not the gst portion, of the fusion proteins. To study their individual functions, each of the four C proteins was fused downstream of glutathione S-transferase. The gstC', gstC, gstY1, and gstY1 fusion proteins were all able to bind L protein and to inhibit viral mRNA and (+)-leader RNA synthesis, and antigenome replication in vitro. In addition, the nonfusion C, Y1, and Y2 proteins all inhibited transcription. The inhibition of (+)-leader RNA and mRNA synthesis by wt C proteins (nonfusion) showed nearly identical dose-response curves, suggesting that inhibition occurs early in RNA synthesis.