The Autographa californica multiple nucleopolyhedrovirus (AcMNPV) ac78 gene is one of the baculovirus core genes. Recent studies showed that ac78 is essential for budded virion (BV) production and the embedding of occlusion-derived virion (ODV) into occlusion body during the AcMNPV life cycle. Here, we report that an ac78-knockout AcMNPV (vAc78KO) constructed in this study had different phenotypes than those described in the previous studies. A few infectious BVs were detected using titer assays, immunoblot analyses and plaque assays, indicating that ac78 is not essential for BV formation. Electron microscopy confirmed that the ac78 deletion did not affect nucleocapsid assembly and ODV formation. However, the numbers of multiple nucleocapsid-enveloped ODVs and ODV-embedded occlusion bodies were significantly decreased. Subsequently, the highly conserved amino acid residues 2-25 and 64-88 of Ac78, which are homologous to an oxidoreductase and cytochrome c oxidase, respectively, were demonstrated to play a crucial role in the morphogenesis of multiple nucleocapsid-enveloped ODV. Immunoblot analysis found that Ac78 was an ODV envelope-associated protein. Consistently, amino acid residues 56-93 of Ac78 were identified as an inner nuclear membrane sorting motif, which may direct the localization of Ac78 to the ODV envelope. In vivo infectivity assays showed that the occlusion bodies of vAc78KO were unable to establish primary infection in the midgut of Trichoplusia ni larvae. Taken together, our results suggest that ac78 plays an important role in BV production and proper multiple nucleocapsid-enveloped ODV formation, as well as AcMNPV primary infection in vivo.