The encephalitogenic New World alphaviruses, including Venezuelan (VEEV), eastern (EEEV), and western equine encephalitis viruses, constitute a continuing public health threat in the United States. They circulate in Central, South, and North America and have the ability to cause fatal disease in humans and in horses and other domestic animals. We recently demonstrated that these viruses have developed the ability to interfere with cellular transcription and use it as a means of downregulating a cellular antiviral response. The results of the present study suggest that the N-terminal, approximately 35-amino-acid-long peptide of VEEV and EEEV capsid proteins plays the most critical role in the downregulation of cellular transcription and development of a cytopathic effect. The identified VEEV-specific peptide C(VEE)33-68 includes two domains with distinct functions: the alpha-helix domain, helix I, which is critically involved in supporting the balance between the presence of the protein in the cytoplasm and nucleus, and the downstream peptide, which might contain a functional nuclear localization signal(s). The integrity of both domains not only determines the intracellular distribution of the VEEV capsid but is also essential for direct capsid protein functioning in the inhibition of transcription. Our results suggest that the VEEV capsid protein interacts with the nuclear pore complex, and this interaction correlates with the protein's ability to cause transcriptional shutoff and, ultimately, cell death. The replacement of the N-terminal fragment of the VEEV capsid by its Sindbis virus-specific counterpart in the VEEV TC-83 genome does not affect virus replication in vitro but reduces cytopathogenicity and results in attenuation in vivo. These findings can be used in designing a new generation of live, attenuated, recombinant vaccines against the New World alphaviruses.