ABSTRACTPestiviruses are members of the family Flaviviridae, a group of enveloped viruses that bud at intracellular membranes. Pestivirus particles contain three glycosylated envelope proteins, Erns, E1, and E2. Among them, E1 is the least characterized concerning both biochemical features and function. E1 from bovine viral diarrhea virus (BVDV) strain CP7 was analyzed with regard to its intracellular localization and membrane topology. Here, it is shown that even in the absence of other viral proteins, E1 is not secreted or expressed at the cell surface but localizes predominantly in the endoplasmic reticulum (ER). Using engineered chimeric transmembrane domains with sequences from E1 and vesicular stomatitis virus G protein, the E1 ER-retention signal could be narrowed down to six fully conserved polar residues in the middle part of the transmembrane domain of E1. Retention was observed even when several of these polar residues were exchanged for alanine. Mutations with a strong impact on E1 retention prevented recovery of infectious viruses when tested in the viral context. Analysis of the membrane topology of E1 before and after the signal peptide cleavage via a selective permeabilization and an in vivo labeling approach revealed that mature E1 is a typical type I transmembrane protein with a single span transmembrane anchor at its C terminus, whereas it adopts a hairpin-like structure with the C terminus located in the ER lumen when the precleavage situation is mimicked by blocking the cleavage site between E1 and E2.IMPORTANCE The shortage of specific antibodies against E1, making detection and further analysis of E1 difficult, resulted in a lack of knowledge on E1 compared to Erns and E2 with regard to biosynthesis, structure, and function. It is known that pestiviruses bud intracellularly. Here, we show that E1 contains its own ER retention signal: six fully conserved polar residues in the middle part of the transmembrane domain are shown to be the determinants for ER retention of E1. Moreover, those six polar residues could serve as a functional group that intensely affect the generation of infectious viral particles. In addition, the membrane topology of E1 has been determined. In this context, we also identified dynamic changes in membrane topology of E1 with the carboxy terminus located on the luminal side of the ER in the precleavage state and relocation of this sequence upon signal peptidase cleavage. Our work provides the first systematic analysis of the pestiviral E1 protein with regard to its biochemical and functional characteristics.