During infection of sac- cells by murine coronavirus MHV A59 the intracellular sites at which progeny virions bud correlate with the distribution of the viral glycoprotein E1. Budding is first detectable by electron microscopy at 6 to 7 hours post infection in small, smooth, perinuclear vesicles and tubules in a region transitional between the rough endoplasmic reticulum and the Golgi apparatus. At later times the rough endoplasmic reticulum becomes the major site of budding and accumulation of progeny virus particles. Indirect immunofluorescence microscopy shows that E1 is confined at 6 hours post infection to the perinuclear region while at later times it also accumulates in the endoplasmic reticulum. At 6 hours post infection the second viral glycoprotein, E2, is distributed throughout the endoplasmic reticulum and is not restricted to the site at which budding begins. Core protein, the third protein in virions, can be detected 2 hours before E1 is detectable and budding begins, and at 6 hours post infection it is distributed throughout the cytosol. We conclude that the time and the site at which the maturation of progeny virions occurs is determined by the accumulation of glycoprotein E1 in intracellular membranes. Only rarely do progeny virions bud directly into the cisternae of the Golgi apparatus but at least some already budded virions are transported to the Golgi apparatus where they occur in structures some of which also contain TPPase, a trans Golgi marker.