ORF78 (ac78) of Autographa californica multiple nucleopolyhedrovirus (AcMNPV) is a baculovirus core gene of unknown function. To determine the role of ac78 in baculovirus life cycle, an ac78-deleted mutant AcMNPV, Ac78KO, was constructed. Quantitative PCR analysis revealed that ac78 is a late gene in the viral life cycle. After transfection into Spodoptera frugiperda cells, Ac78KO produced a single-cell infection phenotype indicating that no infectious budded viruses (BVs) were produced. The defection in BV production was also confirmed by both viral titration and Western blot. However, viral DNA replication is unaffected. Analysis of BV and occlusion derived virus (ODV) revealed that AC78 is associated with both forms of the virions and is a structural protein located to viral envelope. Electron microscopy showed that ac78 also plays an important role in embedding of ODV into occlusion body. This study therefore demonstrates that AC78 is a late virion associated protein and is essential for the viral life cycle.