The cytoplasmic replication of positive-stranded RNA viruses is associated with characteristic, virus-induced membrane structures that are derived from host cell organelles. We used the prototype arterivirus, equine arteritis virus (EAV), to gain insight into the structure and function of the replication/transcription complex (RTC) of nidoviruses. RTCs were isolated from EAV-infected cells, and their activity was studied using a newly developed in vitro assay for viral RNA synthesis, which reproduced the synthesis of both viral genome and subgenomic mRNAs. A detailed characterization of this system and its reaction products is described. RTCs isolated from cytoplasmic extracts by differential centrifugation were inactive unless supplemented with a cytosolic host protein factor, which, according to subsequent size fractionation analysis, has a molecular mass in the range of 59-70 kDa. This host factor was found to be present in a wide variety of eukaryotes. Several EAV replicase subunits cosedimented with newly made viral RNA in a heavy membrane fraction that contained all RNA-dependent RNA polymerase activity. This fraction contained the characteristic double membrane vesicles (DMVs) that were previously implicated in EAV RNA synthesis and could be immunolabeled for EAV nonstructural proteins (nsps). Replicase subunits directly involved in viral RNA synthesis (nsp9 and nsp10) or DMV formation (nsp2 and nsp3) exclusively cosedimented with the active RTC. Subgenomic mRNAs appeared to be released from the complex, whereas newly made genomic RNA remained more tightly associated. Taken together, our data strongly support a link between DMVs and the RNA-synthesizing machinery of arteriviruses.