The hepatitis C virus (HCV) p7 ion channel and non-structural protein 2 (NS2) are both required for efficient assembly and release of nascent virions, yet precisely how these proteins are able to influence this process is unclear. Here, we provide both biochemical and cell biological evidence for a functional interaction between p7 and NS2. We demonstrate that in the context of a genotype 1b subgenomic replicon the localization of NS2 is affected by the presence of an upstream p7 with its cognate signal peptide derived from the C terminus of E2 (SPp7). Immunofluorescence analysis revealed that the presence of SPp7 resulted in the targeting of NS2 to sites closely associated with viral replication complexes. In addition, biochemical analysis demonstrated that, in the presence of SPp7, a significant proportion of NS2 was found in a detergent (Triton X-100)-insoluble fraction, which also contained a marker of detergent resistant rafts. In contrast, in replicons lacking p7, NS2 was entirely detergent soluble and the altered localization was lost. Furthermore, we found that serine 168 within NS2 was required for its localization adjacent to replication complexes, but not for its accumulation in the detergent-insoluble fraction. NS2 physically interacted with NS5A and this interaction was dependent on both p7 and serine 168 within NS2. Mutational and pharmacological analyses demonstrated that these effects were not a consequence of p7 ion channel function, suggesting that p7 possesses an alternative function that may influence the coordination of virus genome replication and particle assembly