Poliovirus RNA replication is initiated when a molecule of UMP is covalently linked to the hydroxyl group of a tyrosine in the terminal protein VPg. This reaction can be reproduced in vitro with an assay that utilizes two purified viral proteins, RNA polymerase 3Dpol and viral protein 3CDpro, synthetic VPg, UTP, and Mg2+. The template for the reaction is either poliovirus RNA or transcripts of a small RNA hairpin, termed cre(2C), located in the coding sequence of protein 2CATPase. The products of the reaction are VPgpU and VPgpUpU, the primers used by 3Dpol for RNA synthesis. With mutant template RNAs in this assay we determined the precise initiation site. Our results indicate that 1) 3Dpol does not possess strict specificity toward the nucleotide it links to VPg, 2) A-5 of the conserved 1GXXXAAAXXXXXXA14 sequence in the loop is the template nucleotide for the linkage of both the first and second UMPs to VPg, 3) VPgpUpU is synthesized by a "slide-back" mechanism, and 4) A-6 provides specificity to the reaction during the slide-back step and also modulates the uridylylation reaction. In additional experiments we determined the effect of mutations in the 5AAA7 sequence of cre(2C) on viral growth, RNA replication, and on the activity of the 2CATPase protein. Furthermore, we observed that the spacing between G-1 and A-5 and the size of the loop affect the yield but not the nature of the VPg-linked products.