The murine coronavirus mouse hepatitis virus gene 1 is expressed as a polyprotein, which is cleaved into multiple proteins posttranslationally. One of the proteins is p28, which represents the amino-terminal portion of the polyprotein and is presumably generated by the activity of an autoproteinase domain of the polyprotein (S. C. Baker, C. K. Shieh, L. H. Soe, M.-F. Chang, D. M. Vannier, and M. M. C. Lai, J. Virol. 63:3693-3699, 1989). In this study, the boundaries and the critical amino acid residues of this putative proteinase domain were characterized by deletion analysis and site-directed mutagenesis. Proteinase activity was monitored by examining the generation of p28 during in vitro translation in rabbit reticulocyte lysates. Deletion analysis defined the proteinase domain to be within the sequences encoded from the 3.6- to 4.4-kb region from the 5' end of the genome. A 0.7-kb region between the substrate (p28) and proteinase domain could be deleted without affecting the proteolytic cleavage. However, a larger deletion (1.6 kb) resulted in the loss of proteinase activity, suggesting the importance of spacing sequences between proteinase and substrate. Computer-assisted analysis of the amino acid sequence of the proteinase domain identified potential catalytic cysteine and histidine residues in a stretch of sequence distantly related to papain-like cysteine proteinases. The role of these putative catalytic residues in the proteinase activity was studied by site-specific mutagenesis. Mutations of Cys-1137 or His-1288 led to a complete loss of proteinase activity, implicating these residues as essential for the catalytic activity. In contrast, most mutations of His-1317 or Cys-1172 had no or only minor effects on proteinase activity. This study establishes that mouse hepatitis virus gene 1 encodes a proteinase domain, in the region from 3.6 to 4.4 kb from the 5' end of the genome, which resembles members of the papain family of cysteine proteinases and that this proteinase domain is responsible for the cleavage of the N-terminal peptide.