The budding of enveloped viruses from cellular membranes is believed to be dependent on the specific interaction between transmembrane spike proteins and cytoplasmic core components of the virus. We found that the cytoplasmic domain of the E2 transmembrane spike glycoprotein of Semliki Forest virus contains two essential determinants which are absolutely needed for budding. The first constitutes a single tyrosine residue in the context of a direct pentapeptide repeat. The tyrosine could only partially be substituted for other residues with aromatic or bulky hydrophobic side chains, although these immediately reverted to the original genotype. The second determinant involves palmitylated cysteine residues flanking the tyrosine repeat motif. The function of these is probably to anchor the tail against the inner surface of the membrane so that the tyrosine-containing motif is properly presented to the nucleocapsid. This is the first example where a membrane virus employs a tyrosine signal for the selective incorporation of spike proteins into budding structures.