The baculovirus chitinase (CHIA) and cathepsin protease (V-CATH) enzymes cause terminal host insect liquefaction, thereby enhancing dissemination of progeny virions in nature. Regulated and delayed cellular release of these host tissue-degrading enzymes ensures liquefaction starts only after optimal viral replication has occurred. Baculoviral CHIA remains intracellular due to its C-terminal KDEL endoplasmic reticulum (ER) retention motif. However, the intracellular processing and trafficking of the baculovirus v-cath expressed cathepsin (V-CATH) is poorly understood and a mechanism for cellular retention of the inactive V-CATH progenitor (proV-CATH) has not been determined. The cathepsins of Autographa californica multiple nucleoplyhedrovirus (AcMNPV) and most other group I alphabaculoviruses have well-conserved chymotrypsin cleavage (Y11) and myristoylation sites (G12) suggestive of proteolytic cleavage to generate proV-CATH, and subsequent acylation which could promote membrane anchoring in order to foster cellular retention of the protein. Proteolytic iii N-terminal processing of baculoviral procathepsin was determined by fusing HA epitope-coding tags to the 5’ and/or 3’ ends of v-cath, indicating that the gene is expressed as a pre-proenzyme. However no evidence for myristoylation of proV-CATH was found, suggesting that another mechanism is responsible for retaining proV-CATH in cells. Prior evidence suggested that CHIA is a proV-CATH folding chaperone and that lack of chiA expression causes proV-CATH to become insoluble and unable to mature into V-CATH enzyme. A putative CHIA chaperone activity for assisting in proV-CATH folding implies that proV-CATH and CHIA interact in the ER of infected cells. Fluorescence microscopy demonstrated co-localization of CHIA-GFP and proV-CATH-RFP fusion proteins in the ER. An mRFP-based bimolecular fluorescence complementation (BiFC) assay helped to determine not only that AcMNPV proV-CATH interacts directly with the full-length viral CHIA, but also that it independently binds to the N-terminal chitin-binding domain (CBD) and C-terminal active site domain (ASD) of CHIA, in the ER during virus replication. Moreover, reciprocal Ni/HIS pull-downs of HIS-tagged proteins confirmed the proV-CATH interactions with CHIA, or with the CBD and ASD biochemically. The reciprocal co-purification of proV-CATH with all three polypeptides (CHIA, CBD, ASD) suggests proV-CATH specifically interacts with each of them, and corroborates the BiFC data. Furthermore, CHIA KDEL deletion allowed for premature secretion of not only CHIA but also of proV-CATH, suggesting that the CHIA/proV-CATH interaction in the ER aids cellular retention of proV-CATH. In contrast to prior reports, it was also determined that CHIA is iv dispensable for correct folding of proV-CATH since proV-CATH produced by a chiA-deficient virus was soluble, prematurely secreted from cells and could mature into V-CATH enzyme. Taken together, these data indicate that the viral chitinase plays a major role in ensuring that proV-CATH is neither prematurely secreted nor activated to V-CATH enzyme.