The protein subunits of the nucleocapsid of the parainfluenza virus simian virus 5 isolated from infected cells after dispersion with trypsin, chymotrypsin, or ficin are cleaved proteolytically. The molecular weights of the subunits which result from cleavage depend on the enzyme used, but are around 43,000, compared to the native subunit of 61,000. In most instances cleavage of the subunit appears to be due to the protease used to disperse the cell, and follows cell disruption. Nucleocapsids composed of native, uncleaved subunits can frequently be obtained from infected cells dispersed without a proteolytic enzyme; however, cleavage occasionally occurs even under those conditions, indicating that cellular proteases can at times cleave this protein. Nucleocapsids containing uncleaved subunits can be isolated from cells persistently infected with simian virus 5, indicating that persistent infection is not invariably associated with intracellular cleavage of this protein. Nucleocapsids composed of native subunits are hydrophobic, whereas those composed of the cleaved subunit can be dispersed in aqueous solution. It is suggested that the portion of the molecule removed by cleavage may be responsible for a specific interaction during virus assembly between the nucleocapsid and those areas of plasma membrane which contain the non-glycosylated viral membrane protein, which is also hydrophobic. An amino acid analysis of native and cleaved subunits has been done. The portion of the subunit removed by cleavage does not have a high proportion of hydrophobic residues, suggesting that those present are arranged together to form a hydrophobic domain. The N termini of both the native and cleaved subunits are blocked. This suggests that the portion of the molecule which is externally disposed and removed by cleavage contains the C terminus, and the cleaved subunit which reacts with the viral RNA contains the N terminus.