The nonstructural protein NSm of Bunyamwera virus (BUNV), the prototype of the Bunyaviridae family, is encoded by the M segment in a polyprotein precursor, along with the virion glycoproteins, in the order Gn-NSm-Gc. As little is known of its function, we examined the intracellular localization, membrane integrality, and topology of NSm and its role in virus replication. We confirmed that NSm is an integral membrane protein and that it localizes in the Golgi complex, together with Gn and Gc. Coimmunoprecipitation assays and yeast two-hybrid analysis demonstrated that NSm was able to interact with other viral proteins. NSm is predicted to contain three hydrophobic (I, III, and V) and two nonhydrophobic (II and IV) domains. The N-terminal nonhydrophobic domain II was found in the lumen of an intracellular compartment. A novel BUNV assembly assay was developed to monitor the formation of infectious virus-like-particles (VLPs). Using this assay, we showed that deletions of either the complete NSm coding region or domains I, II, and V individually seriously compromised VLP production. Consistently, we were unable to rescue viable viruses by reverse genetics from cDNA constructs that contained the same deletions. However, we could generate mutant BUNV with deletions in NSm domains III and IV and also a recombinant virus with the green fluorescent protein open reading frame inserted into NSm domain IV. The mutant viruses displayed differences in their growth properties. Overall, our data showed that the N-terminal region of NSm, which includes domain I and part of domain II, is required for virus assembly and that the C-terminal hydrophobic domain V may function as an internal signal sequence for the Gc glycoprotein.