Viral membrane proteins play an important role in the assembly and disassembly of enveloped viruses. Oligomerization and proteolytic cleavage events are involved in controlling the functions of these proteins during virus entry and release. Using tick-borne encephalitis virus as a model we have studied the role of the flavivirus envelope proteins E and prM/M in these processes. Experiments with acidotropic agents provide evidence that the virus is taken up by receptor-mediated endocytosis and that the acidic pH in endosomes plays an important role for virus entry. The envelope glycoprotein E undergoes irreversible conformational changes at acidic pH, as indicated by the loss of several monoclonal antibody-defined epitopes, which coincide with the viral fusion activity in vitro. Sedimentation analysis reveals that these conformational changes lead to aggregation of virus particles, apparently by the exposure of hydrophobic sequence elements. None of these features are exhibited by immature virions containing E and prM rather than E and M. Detergent solubilization, sedimentation, and crosslinking experiments provide evidence that prM forms a complex with protein E which prevents the conformational changes necessary for fusion activity. The functional role of prM before its endoproteolytic cleavage by a cellular protease thus seems to be the protection of protein E from acid-inactivation during its passage through acidic trans Golgi vesicles in the course of virus release.