Enveloped viruses carry highly specialized glycoproteins that catalyze membrane fusion under strict spatial and temporal control. To prevent premature activation after biosynthesis, viral class I fusion proteins adopt a locked conformation and require proteolytic cleavage to render them fusion-ready. This priming step may occur during virus exit from the infected cell, in the extracellular milieu or during entry at or in the next target cell. Proteolytic processing of coronavirus spike (S) fusion proteins during virus entry has been suggested but not yet formally demonstrated, while the nature and functionality of the resulting subunit is still unclear. We used a prototype coronavirus-mouse hepatitis virus (MHV)-to develop a conditional biotinylation assay that enables the specific identification and biochemical characterization of viral S proteins on virions that mediated membrane fusion with the target cell. We demonstrate that MHV S proteins are indeed cleaved upon virus endocytosis, and we identify a novel processing product S2* with characteristics of a fusion-active subunit. The precise cleavage site and the enzymes involved remain to be elucidated.