An internal site on bacteriophage Qβ RNA, the M-site (map position 2545 to 2867), was recently shown by us to be required for the efficient initiation of minus strand synthesis by Qβ replicase. In a more detailed mutational analysis, we show here that the essential elements within the M-site consist of two successive stem-loop structures followed by a bulge loop of unpaired purines, located at nucleotides 2696 to 2754 on the tip of a long, imperfectly base-paired stalk. Mutational changes affecting the sequences of paired or unpaired nucleotides in this segment reduced the template efficiency only mildly. The only severe effects were observed when one of the helical stems or the unpaired bulge was completely deleted or substantially shortened. We conclude that the three-dimensional backbone arrangement of these three elements constitutes the feature recognized by replicase. The role of the long stalk remains undetermined, because mutations that either stabilized or disrupted its base-pairing barely affected template activity, and even deletion of a major portion of one of its strands did not cause complete inactivation. Earlier evidence had implicated protein S1 (the α subunit of replicase) as the mediator of the M-site interaction. The lack of an active M-site on the Qβ RNA template has the same quantitative and qualitative effects on template recognition as the absence of the S1 protein from replicase in the presence of wild-type RNA. We therefore believe that the M-site interaction explains most of the role of S1 protein in the replication of Qβ RNA by replicase.