Abstract Background The yeast retrotransposon Ty3 forms stable virus-like particles. Gag3, the major structural protein, is composed of capsid, spacer and nucleocapsid domains. The capsid domain of Gag3 was previously modeled as a structure similar to retrovirus capsid. Findings Two-hybrid analysis was used to understand the interactions that contribute to particle assembly. Gag3 interacted with itself as predicted based on its role as the major structural protein. The N-terminal subdomain (NTD) of the capsid was able to interact with itself and with the C-terminal subdomain (CTD) of the capsid, but interacted less well with intact Gag3. Mutations previously shown to block particle assembly disrupted Gag3 interactions more than subdomain interactions. Conclusions The findings that the NTD interacts with itself and with the CTD are consistent with previous modeling and a role similar to that of the capsid in retrovirus particle structure. These results are consistent with a model in which the Gag3-Gag3 interactions that initiate assembly differ from the subdomain interactions that potentially underlie particle stability.