Borna disease virus (BDV) is a nonsegmented negative-strand (NNS) RNA virus that is unusual because it replicates in the nucleus. The most abundant viral protein in infected cells is a 38/39-kDa doublet that is presumed to represent the nucleocapsid. Infectious particles also contain high levels of this protein, accounting for at least 50% of the viral proteins. The two forms of the protein differ by an additional 13 amino acids that are present at the amino terminus of the 39-kDa form and missing from the 38-kDa form. To examine whether this difference in amino acid content affects the localization of this protein in cells, the 39- and 38-kDa proteins were expressed in transfected cells. The 39-kDa form was concentrated in the nucleus, whereas the 38-kDa form was found in both the nucleus and cytoplasm. Inspection of the extra 13 amino acids present in the 39-kDa form revealed a sequence (Pro-Lys-Arg-Arg) that is very similar to the nuclear localization signals (in both sequence homology and amino-terminal location) of the VP1 proteins of simian virus 40 and polyomavirus. Primer extension analysis of total RNA from infected cells suggests that there are two mRNA species encoding the two forms of the nucleocapsid protein. In infected cells, the 39-kDa form is expressed at about twofold-higher levels than the 38-kDa form at both the RNA and protein levels. The novel nuclear localization of the 39-kDa nucleocapsid-like protein suggests that this form of the protein is targeted to the nucleus, the site for viral RNA replication, and that it may associate with genomic RNA.