Abstract: Retroviruses in nondividing cells and yeast retrotransposons must transit the nuclear membrane in order for integration to occur. Mutations in a bipartite basic motif in the carboxyl-terminal domain of the Ty3 integrase (IN) protein were previously shown to block transposition at a step subsequent to 3'-end processing of Ty3 extrachromosomal DNA. In this work, the Ty3 IN was shown to be sufficient to target green fluorescent protein to the nucleolus. Mutations in the bipartite basic motif abrogated this localization. The region containing the motif was shown to be sufficient for nuclear but not subnuclear localization of a heterologous protein. Viruslike particles (VLPs) from cells expressing a Ty3 element defective for nuclear localization were inactive in an in vitro integration assay, suggesting that nuclear entry is required to form active VLPs or that this motif is required for post-nuclear entry steps. Ty3 inserts at transcription initiation sites of genomic tRNA genes and plasmid-borne 5S and U6 RNA genes transcribed by RNA polymerase III. In situ hybridization with Ty3- and Ty3 long terminal repeat-specific probes showed that these elements which are associated with tRNA genes do not colocalize with the ribosomal DNA (rDNA). However, a PCR assay of cells undergoing transposition showed that Ty3 insertion does occur into the 5S genes, which, in yeast, are interspersed with the rDNA and therefore, like Ty3 IN, associated with the nucleolus.