The M2 proteins of influenza A and B virus, AM2 and BM2, respectively, are transmembrane proteins that oligomerize in the viral membrane to form proton-selective channels. Proton conductance of the M2 proteins is required for viral replication; it is believed to equilibrate pH across the viral membrane during cell entry and across the trans-Golgi membrane of infected cells during viral maturation. In addition to the role of M2 in proton conductance, recent mutagenesis and structural studies suggest that the cytoplasmic domains of the M2 proteins also play a role in recruiting the matrix proteins to the cell surface during virus budding. As viral ion channels of minimalist architecture, the membrane-embedded channel domain of M2 has been a model system for investigating the mechanism of proton conduction. Moreover, as a proven drug target for the treatment of influenza A infection, M2 has been the subject of intense research for developing new anti-flu therapeutics. AM2 is the target of two anti-influenza A drugs, amantadine and rimantadine, both belonging to the adamantane class of compounds. However, resistance of influenza A to adamantane is now widespread due to mutations in the channel domain of AM2. This review summarizes the structure and function of both AM2 and BM2 channels, the mechanism of drug inhibition and drug resistance of AM2, as well as the development of new M2 inhibitors as potential anti-flu drugs.