The murine leukaemia virus (MLV) gag gene encodes a small protein called p12 that is essential for the early steps of viral replication. The N- and C-terminal regions of p12 are sequentially acting domains, both required for p12 function. Defects in the C-terminal domain can be overcome by introducing a chromatin binding motif into the protein. However, the function of the N-terminal domain remains unknown. Here, we undertook a detailed analysis of the effects of p12 mutation on incoming viral cores. We found that both reverse transcription complexes and isolated mature cores from N-terminal p12 mutants have altered capsid complexes compared to wild type virions. Electron microscopy revealed that mature N-terminal p12 mutant cores have different morphologies, although immature cores appear normal. Moreover, in immunofluorescent studies, both p12 and capsid proteins were lost rapidly from N-terminal p12 mutant viral cores after entry into target cells. Importantly, we determined that p12 binds directly to the MLV capsid lattice. However, we could not detect binding of an N-terminally altered p12 to capsid. Altogether, our data imply that p12 stabilises the mature MLV core, preventing premature loss of capsid, and that this is mediated by direct binding of p12 to the capsid shell. In this manner, p12 is also retained in the pre-integration complex where it facilitates tethering to mitotic chromosomes. These data also explain our previous observations that modifications to the N-terminus of p12 alter the ability of particles to abrogate restriction by TRIM5alpha and Fv1, factors that recognise viral capsid lattices.