In polarized epithelial cells, the release of enveloped viruses by budding at the cell surface is restricted to a specific cell membrane domain, either the apical or basolateral domain. To investigate the role of the envelope glycoprotein and the capsid proteins of human immunodeficiency virus type 1 (HIV-1) in determining the site of virus assembly, we analyzed virus maturation in a polarized monkey kidney cell line. A line of cells harboring the HIV-1 provirus (VERO-pFN) was found to differentiate into polarized epithelial cell monolayers upon reaching confluency. By electron microscopy, virus maturation was observed predominantly at the basolateral membranes of VERO-pFN cells. Analysis of HIV-1 proteins revealed that virtually all of glycoprotein gpl20 and capsid protein p24 were found in the basolateral medium, while no HIV-1 proteins were detected apically. A recombinant vaccinia virus (W) expressing the HIV-1 gag polyprotein (VVg,) was used to determine the site of release of HIV-1 core particles in polarized epithelial cells in the presence or absence of envelope glycoproteins. When cells were infected with WVV in the absence of envelope proteins, similar amounts of the p24 capsid protein were released into virus particles at the apical or basolateral surface. In contrast, when cells were doubly infected with Wg,, and a recombinant W expressing the HIV-1 envelope glycoprotein (WeVY), 94% of p24 and all of gpl20 were found to be associated with particles released into the basolateral medium. These results indicate that the HIV-1 envelope glycoprotein directly influences the site of release of virus particles containing the gag protein, probably via a specific interaction between the envelope protein and the gag protein.