Vaccinia virus (vv), a member of the poxvirus family, is unique among most DNA viruses in that its replication occurs in the cytoplasm of the infected host cell. Although this viral process is known to occur in distinct cytoplasmic sites, little is known about its organization and in particular its relation with cellular membranes. The present study shows by electron microscopy (EM) that soon after initial vv DNA synthesis at 2 h postinfection, the sites become entirely surrounded by membranes of the endoplasmic reticulum (ER). Complete wrapping requires ~45 min and persists until virion assembly is initiated at 6 h postinfection, and the ER dissociates from the replication sites. [(3)H]Thymidine incorporation at different infection times shows that efficient vv DNA synthesis coincides with complete ER wrapping, suggesting that the ER facilitates viral replication. Proteins known to be associated with the nuclear envelope in interphase cells are not targeted to these DNA-surrounding ER membranes, ruling out a role for these molecules in the wrapping process. By random green fluorescent protein-tagging of vv early genes of unknown function with a putative transmembrane domain, a novel vv protein, the gene product of E8R, was identified that is targeted to the ER around the DNA sites. Antibodies raised against this vv early membrane protein showed, by immunofluorescence microscopy, a characteristic ring-like pattern around the replication site. By electron microscopy quantitation the protein concentrated in the ER surrounding the DNA site and was preferentially targeted to membrane facing the inside of this site. These combined data are discussed in relation to nuclear envelope assembly/disassembly as it occurs during the cell cycle.