Bluetongue virus (BTV) is a nonenveloped double-stranded RNA virus belonging to the family Reoviridae. The two outer capsid proteins, VP2 and VP5, are responsible for virus entry. However, little is known about the roles of these two proteins, particularly VP5, in virus trafficking and assembly. In this study, we used density gradient fractionation and methyl beta cyclodextrin, a cholesterol-sequestering drug, to demonstrate not only that VP5 copurifies with lipid raft domains in both transfected and infected cells, but also that raft domain integrity is required for BTV assembly. Previously, we showed that BTV nonstructural protein 3 (NS3) interacts with VP2 and also with cellular exocytosis and ESCRT pathway proteins, indicating its involvement in virus egress (A. R. Beaton, J. Rodriguez, Y. K. Reddy, and P. Roy, Proc. Natl. Acad. Sci. USA 99:13154-13159, 2002; C. Wirblich, B. Bhattacharya, and P. Roy J. Virol. 80:460-473, 2006). Here, we show by pull-down and confocal analysis that NS3 also interacts with VP5. Further, a conserved membrane-docking domain similar to the motif in synaptotagmin, a protein belonging to the SNARE (soluble N-ethylmaleimide-sensitive fusion attachment protein receptor) family was identified in the VP5 sequence. By site-directed mutagenesis, followed by flotation and confocal analyses, we demonstrated that raft association of VP5 depends on this domain. Together, these results indicate that VP5 possesses an autonomous signal for its membrane targeting and that the interaction of VP5 with membrane-associated NS3 might play an important role in virus assembly.