Hepatitis C virus core protein is targeted to lipid droplets, which serve as intracellular storage organelles, by its C-terminal domain, termed D2. From circular dichroism and nuclear magnetic resonance analyses, we demonstrate that the major structural elements within D2 consist of two amphipathic alpha-helices (Helix I and Helix II) separated by a hydrophobic loop. Both helices require a hydrophobic environment for folding, indicating that lipid interactions contribute to their structural integrity. Mutational studies revealed that a combination of Helix I, the hydrophobic loop, and Helix II is essential for efficient lipid droplet association and pointed to an in-plane membrane interaction of the two helices at the phospholipid layer interface. Aside from lipid droplet association, membrane interaction of D2 is necessary for folding and stability of core following maturation at the endoplasmic reticulum membrane by signal peptide peptidase. These studies identify critical determinants within a targeting domain that enable trafficking and attachment of a viral protein to lipid droplets. They also serve as a unique model for elucidating the specificity of protein-lipid interactions between two membrane-bound organelles.