Steady progress has been made in defining both the viral and cellular determinants of retroviral assembly and release. Although it is widely accepted that targeting of the Gag polypeptide to the plasma membrane is critical for proper assembly of HIV-1, the intracellular interactions and trafficking of Gag to its assembly sites in the infected cell are poorly understood. HIV-1 Gag was shown to interact and co-localize with calmodulin (CaM), a ubiquitous and highly conserved Ca 2؉ -binding protein expressed in all eukaryotic cells, and is implicated in a variety of cellular functions. Binding of HIV-1 Gag to CaM is dependent on calcium and is mediated by the N-terminally myristoylated matrix (myr(؉)MA) domain. Herein, we demonstrate that CaM binds to myr(؉)MA with a dissociation constant (K d ) of ϳ2 M and 1:1 stoichiometry. Strikingly, our data revealed that CaM binding to MA induces the extrusion of the myr group. However, in contrast to all known examples of CaM-binding myristoylated proteins, our data show that the myr group is exposed to solvent and not involved in CaM binding. The interactions between CaM and myr(؉)MA are endothermic and entropically driven, suggesting that hydrophobic contacts are critical for binding. As revealed by NMR data, both CaM and MA appear to engage substantial regions and/or undergo significant conformational changes upon binding. We believe that our findings will provide new insights on how Gag may interact with CaM during the HIV replication cycle.Gag is the major structural protein encoded by HIV-1 and contains all of the viral elements required to drive virus assembly (1-3). HIV-1 Gag targeting to the plasma membrane (PM) 2 is critical for proper and efficient assembly to produce progeny virions (1, 3-9). During virus maturation, Gag is cleaved into myristoylated matrix (myr(ϩ)MA), capsid, and nucleocapsid proteins, inducing major morphological reorganization of the virus (1, 2, 4, 5, 10). In many cell types, HIV-1 Gag budding and assembly has been shown to occur predominantly on the PM (4 -9, 11-18). Gag binding to the PM is mediated by the MA domain and enhanced by multimerization. Proper assembly and efficient binding of Gag to the PM requires a myristyl (myr) group as a membrane anchor and a cluster of basic residues localized within the N-terminal domain to facilitate interactions with acidic phospholipids (1,2,19,20).Steady progress has been made in defining both the viral and cellular determinants of HIV-1 assembly and release (6). However, the trafficking pathway used by Gag to reach assembly sites in the infected cell is poorly understood. Studies by Freed, Ono, and co-workers (21-23) demonstrated that the ultimate localization of HIV-1 Gag at virus assembly sites is dependent on phosphatidylinositol-(4,5)-bisphosphate (PI(4,5)P 2 ), a cellular factor localized at the inner leaflet of the PM (24 -26). Our structural studies revealed that PI(4,5)P 2 binds directly to HIV-1 MA, inducing a conformational change that triggers myr exposure (27). In addition to PI(4,5)P 2 ...