When synthesis of the 25-kDa vaccinia virus core protein VP8 is repressed, mature virus particles of normal appearance are produced to approximately 80% of wild-type levels but these particles are over 100-fold less infectious than wild-type particles (D. Wilcock and G. L. Smith, Virology 202:294-304, 1994). Here we show that virions which lack VP8 can bind to and enter cells but the levels of steady-state RNA are greatly reduced in comparison with those for wild-type infections. In vitro assays using permeabilized virions demonstrated that VP8-deficient virions had drastically reduced rates of transcription (RNA synthesis was decreased by 80 to 96%) and that the extrusion of RNA transcripts from these virions was also decreased. Low concentrations of sodium deoxycholate extracted proteins more efficiently from VP8-deficient virions than from wild-type virions. The increased fragility of VP8-deficient virions and their slower RNA extrusion rates suggest that VP8 may be required for the correct formation of the core. Virions which lack VP8 were shown to contain a full complement of transcription enzymes, and soluble extracts from these virions were active in transcription assays using either single-stranded M13 DNA or exogenous plasmid template containing a vaccinia virus early promoter. Thus, the defect in transcription is due not to a lack of specific transcriptional enzymes within virions but rather to the inability of these enzymes to efficiently transcribe the DNA genome packaged within VP8-deficient virions. These results suggest that VP8 is required for the correct packaging of the viral DNA genome and/or for the efficient transcription of packaged virion DNA, which has a higher degree of structural complexity than plasmid templates. Possible roles for VP8 in these processes are discussed.