In this paper we describe the posttranslational processing of the p63/LMP (latent membrane protein) encoded by Epstein-Barr virus in transformed B cells. Specifically, we show that after synthesis, free LMP disappeared with a half-life of about 0.5 h. This was caused by the association of LMP with an insoluble complex. All detectable LMP in the plasma membrane was insoluble. This interaction was resistant to nondenaturing detergents but readily dissociated with 8 M urea or by boiling in 0.5% sodium dodecyl sulfate, suggesting that LMP may be associated with cytoskeletal elements. Most of the Nonidet P-40-insoluble LMP was phosphorylated (ppLMP) primarily on serine but also on threonine residues. No phosphotyrosine was detected. Furthermore, greater than 90% of the ppLMP resided in the Nonidet P-40-insoluble fraction, suggesting a strong correlation between complexing and phosphorylation. Additionally, ppLMP was found to be associated with a 53,000-molecular-weight phosphoprotein (pp53) of unknown origin. Finally, LMP turned over extremely rapidly, with a half-life of about 2 h. Taken together, these properties suggest that although LMP falls broadly within the category of phosphorylated, cytoskeleton-associated oncoproteins, it is nevertheless clearly different from any previously described member of this family.