Cold-adapted (ca) B/Ann Arbor/1/66 is the master donor virus for influenza B (MDV-B) vaccine component of live attenuated influenza FluMist vaccine. The six internal protein gene segments of MDV-B confer the characteristic cold-adapted (ca), temperature-sensitive (ts) and attenuated (att) phenotypes to the reassortant vaccine strains that contain the HA and NA RNA segments from the circulating wild type strains. Previously, we have mapped the loci in the NP, PA and M genes that determine the ca, ts and att phenotypes of MDV-B. In this report, the ts mechanism of MDV-B was described by comparing replication of MDV-B with its wild type counterpart at permissive and restricted temperatures. We showed that the PA and NP proteins of MDV-B are defective in RNA polymerase function at the restricted temperature of 37 degrees C resulting in greatly reduced viral RNA and protein synthesis. In addition, the two M1 residues, Q159 and V183 that are unique to MDV-B, contribute to reduced virus replication at temperatures greater than 33 degrees C, possibly due to the reduced M1 membrane association and its reduced virion M1 incorporation. Thus, the previously identified MDV-B loci not only reduce viral polymerase function at the restricted temperature but also affect virus assembly and release.