We present the sequence of reovirus serotype 3 (strain Dearing) genome segment L3 which encodes protein lambda 1, one of the two major components of the core shell. The genome segment is 3896 nucleotides long, with 5'- and 3'-noncoding regions of 13 and 181 nucleotides, respectively. Protein lambda 1 is 1233 amino acids long. It is a slightly acidic protein, with a predicted alpha-helix and beta-sheet content of 23.6 and 28.3%, respectively. Its rather low predicted alpha-helix contact is consistent with its being a structural protein. The 123 amino acid long region at its amino terminus is very hydrophilic and contains three alpha-helical regions, one being 26 amino acids long. Protein lambda 1 contains two functional motifs. The first is a nucleotide binding site -TKGKSSG- starting at residue 8, the other is a "zinc finger" motif centered around amino acid residue 194. This suggests that protein lambda 1 functions during the transcription of either dsRNA into plus strands or of plus strands into minus strands, or during both. It displays no significant sequence similarity to any protein sequence in the GenBank data base.