During serial passaging of rubella virus (RUB) in cell culture, the dominant species of defective-interfering RNA (DI) generated contains an in-frame deletion between the capsid protein (C) gene and E1 glycoprotein gene resulting in production of a C-E1 fusion protein that is necessary for the maintenance of the DI [Tzeng, W.P., Frey, T.K. (2006). C-E1 fusion protein synthesized by rubella virus DI RNAs maintained during serial passage. Virology 356 198-207.]. A BHK cell line stably expressing the RUB structural proteins was established which was used to package DIs into virus particles following transfection with in vitro transcripts from DI infectious cDNA constructs. Packaging of a DI encoding an in-frame C-GFP-E1 reporter fusion protein corresponding to the C-E1 fusion protein expressed in a native DI was only marginally more efficient than packaging of a DI encoding GFP, indicating that the C-E1 fusion protein did not function by enhancing packaging. However, infection with the DI encoding the C-GFP-E1 fusion protein (in the absence of wt RUB helper virus) resulted in formation of clusters of GFP-positive cells and the percentage of GFP-positive cells in the culture following infection remained relatively constant. In contrast, a DI encoding GFP did not form GFP-positive clusters and the percentage of GFP-positive cells declined by roughly half from 2 to 4 days post-infection. Cluster formation and sustaining the percentage of infected (GFP-positive) cells required the C part of the fusion protein, including the downstream but not the upstream of two arginine clusters (both of which are associated with RNA binding and association with mitochondrial p32 protein) and the E1 part through the transmembrane sequence, but not the C-terminal cytoplasmic tail. Among a collection of mutant DI constructs, cluster formation and sustaining infected cell percentage correlated with maintenance during serial passage with wt RUB. We hypothesize that cluster formation and sustaining infected cell percentage increase the likelihood of co-infection by a DI and wt RUB during serial passage thus enhancing maintenance of the DI. Cluster formation and sustaining infected cell percentage were found to be due to a combination of attenuated cytopathogenicity of DIs that express the C-E1 fusion protein and cell-to-cell movement of the DI. In infected cells, the C-GFP-E1 fusion protein was localized to potentially novel vesicular structures that appear to originate from ER-Golgi transport vacuoles. This species of DI expressing a C-E1 fusion protein that exhibits attenuated cytopathogenicity and the ability to increase the number of infected cells through cell-to-cell movement could be the basis for development of an attractive vaccine vector.