Hepatitis C virus encodes two envelope glycoproteins, E1 and E2, that are released from a polyprotein precursor after cleavage by host signal peptidase(s). These proteins contain a large N-terminal ectodomain and a C-terminal transmembrane domain, and they assemble as a noncovalent heterodimer. The transmembrane domains of hepatitis C virus envelope glycoproteins have been shown to be multifunctional: (1) they are membrane anchors, (2) they bear ER retention signals, (3) they contain a signal sequence function, and (4) they are involved in E1-E2 heterodimerisation. Due to these multiple functions, the topology adopted by these transmembrane domains has given rise to much controversy. They are less than 30 amino acid residues long and are composed of two stretches of hydrophobic residues separated by a short segment containing one or two fully conserved positively charged residues. The presence of a signal sequence function in the C-terminal half of the transmembrane domains of E1 and E2 had suggested that these domains are composed of two membrane spanning segments. However, the two hydrophobic stretches are too short to make two membrane spanning alpha-helices. These discrepancies can now be explained by a dynamic model, based on experimental data, describing the early steps of the biogenesis of hepatitis C virus envelope glycoproteins. In this model, the transmembrane domains of E1 and E2 form a hairpin structure before cleavage by a signal peptidase, and a reorientation of the second hydrophobic stretch occurs after cleavage to produce a single membrane spanning domain.