Viral genomic RNA encapsidated by nucleoprotein (N) forms functional template for the transcription and replication of vesicular stomatitis virus (VSV). The crystal structure of the N-RNA complex shows that RNA is tightly sequestered between the two lobes of the N protein. The residue (R7) in N-terminal arm of N is of great importance to the formation of functional N-RNA template. In our study, we found that single amino acid substitution (R7A) resulted in the loss of CAT expression in vitro minigenome system at 37 °C. But the R7A had little effect on CAT expression at 31 °C. Further analysis showed that R7A had great effects on the RNA synthesis and the formation of cytoplasmic inclusions of VSV only at 37 °C not at 31 °C. For the further investigation of the effect of R7A on virus replication, we checked the dominant-negative effect of NR7A in minigenome system and the single step curve of recombinant virus with R7A mutation in N protein (rVSVR7A) under 37 °C and 31 °C separately. Our results showed that the mutation of R7A within the N-terminal arm of N affected both replication and transcription and induced VSV to become temperature sensitive.