Autographa californica multiple nucleopolyhedrovirus (AcMNPV) orf24 (pkip) is a unique Alphabaculovirus gene. A previous study showed that a temperature-sensitive mutant of AcMNPV with a mutation in pkip displayed severe defects in progeny budded virion (BV) production and very late gene transcription, however, the underlying mechanism has not been determined. To investigate the function of pkip in the baculovirus replication cycle, we constructed a pkip-knockout AcMNPV bacmid in this study. Our results showed that deletion of pkip led to significant reduction of BV production, while the synthesis of viral DNA and the transcription of early and late genes were not affected. Further examination by transmission electron microscopy analysis showed that deletion of pkip resulted in the formation of massive electron-lucent tubular structures in the nucleus of the infected cells, along with some normal electron-dense nucleocapsids. The pkip-encoded protein PKIP could be detected at late phase during infection and was distributed in both the cytoplasm and nuclei of viruses-infected cells, with a ring pattern near the inner nuclear membrane and punctate distribution in the virogenic stroma area. Biochemical fractionation of virions into nucleocapsid and envelop components showed that PKIP was associated with the nucleocapsid fraction of BV. Taken together, our results indicated that PKIP is associated with nucleocapsids of BV and involved in nucleocapsid assembly, which contributes to the optimal production of BV.