Two mRNA species are derived from the influenza C virus RNA segment six, (i) a colinear transcript containing a 374-amino-acid residue open reading frame (referred to herein as the seg 6 ORF) which is translated to yield the p42 protein, and (ii) a spliced mRNA which encodes the influenza C virus matrix (CM1) protein consisting of the first 242 amino acids of p42. The p42 protein undergoes proteolytic cleavage at a consensus signal peptidase cleavage site after residue 259, yielding the p31 and CM2 proteins. Translocation of p42 into the endoplasmic reticulum membrane occurs cotranslationally and requires the hydrophobic internal signal peptide (residues 239 to 259), as well as the predicted transmembrane domain of CM2 (residues 285 to 308). The p31 protein was found to undergo rapid degradation after cleavage from p42. Addition of the 26S proteasome inhibitor lactacystin to influenza C virus-infected or seg 6 ORF cDNA-transfected cells drastically reduced p31 degradation. Transfer of the 17-residue C-terminal region of p31 to heterologous proteins resulted in their rapid turnover. The hydrophobic nature, but not the specific amino acid sequence of the 17-amino-acid C terminus of p31 appears to act as the signal for targeting the protein to membranes and for degradation.