The phosphoprotein (P) of human parainfluenza virus type 3 (HPIV 3) plays a central role in the viral genome RNA transcription and replication. It acts as an essential cofactor of the RNA polymerase (L) by forming a functional L-P complex, binds to the genomic N-RNA template to recruit the L-P complex for RNA synthesis, and interacts with the nucleocapsid protein (N) to form the encapsidation complex (N-P). We have earlier demonstrated that the P protein forms oligomers (B. P. De, M. A. Hoffman, S. Choudhary, C. C. Huntley, and A. K. Banerjee, 2000, J. Virol. 74, 5886-5895) and in this article we identified the putative oligomerization domain of the P protein and studied the role of this domain in transcription. By computer analyses, we have localized a high-score coiled-coil motif characteristic of oligomerization domain residing between the amino acid residues 423 and 457 of the P protein. Deletion of 12 amino acid residues within this coiled-coil motif (P Delta 439-450) completely abrogated oligomerization, whereas deletion in other regions outside the motif had no significant effect. The mutant P Delta 439-450 was both defective in mRNA synthesis in vitro and minigenome transcription in vivo. Interestingly, the mutant interacted with L to form L-P complex, albeit less efficiently, while its interaction with N protein to form N-P complex and with N-RNA template was similar to the wt P protein. Our results indicate that oligomerization provides a key function to the P protein in the transcription of HPIV 3 genome RNA.