Arenaviruses have a bisegmented negative-strand RNA genome whose proteomic capability is limited to only four polypeptides, namely, nucleoprotein (NP), surface glycoprotein (GP) that is proteolytically processed into GP1+GP2, polymerase (L), and a small (11-kDa) RING finger protein (Z). The role of Z during the Lymphocytic choriomeningitis virus (LCMV) life cycle is poorly understood. We investigated the function of Z in virus transcription and replication by using a reverse genetic system for the prototypic arenavirus LCMV. This system involves an LCMV minigenome and the minimal viral trans-acting factors (NP and L), expressed from separated cotransfected plasmids. Cotransfection of the Z cDNA strongly inhibited LCMV minigenome expression. The effect required synthesis of Z protein; its magnitude was dose dependent and occurred with levels of Z protein substantially lower than those observed in LCMV-infected cells. Coexpression of Z did not prevent the encapsidation of plasmid supplied minigenome, but it affected both transcription and RNA replication similarly. Mutations in Z that unfolded its RING finger domain eliminated its inhibitory activity, but RING proteins not related to Z did not affect LCMV minigenome expression. Consistent with the minigenome results, cells transiently expressing Z exhibited decreased susceptibility to infection with LCMV.