The human cytomegalovirus immediate-early protein pUL37x1 induces the release of Ca(2+) stores from the endoplasmic reticulum into the cytosol. This release causes reorganization of the cellular actin cytoskeleton with concomitant cell rounding. Here we demonstrate that pUL37x1 activates Ca(2+)-dependent protein kinase Cα (PKCα). Both PKCα and Rho-associated protein kinases are required for actin reorganization and cell rounding; however, only PKCα is required for the efficient production of virus progeny, arguing that HCMV depends on the kinase for a second function. PKCα activation is also needed for the production of large (1-5 μm) cytoplasmic vesicles late after infection. The production of these vesicles is blocked by inhibition of fatty acid or phosphatidylinositol-3-phosphate biosynthesis, and the failure to produce vesicles is correlated with substantially reduced production of enveloped virus capsids. These results connect earlier work identifying a requirement for lipid synthesis with specific morphological changes, and support the argument that the PKCα-induced large vesicles are either required for the efficient production of mature virus particles or serve as a marker for the process.