Influenza A virus matrix protein (M1) plays an important role in virus assembly and budding. Besides a well-characterized basic amino acid-rich nuclear localization signal region at positions 101 to 105, M1 contains another basic amino acid stretch at positions 76 -78 that is highly conserved among influenza A and B viruses, suggesting the importance of this stretch. To understand the role of these residues in virus replication, we mutated them to either lysine (K), alanine (A), or aspartic acid (D). We could generate viruses possessing either single or combination substitutions with K or single substitution with A at any of these positions, but not those with double substitutions with A or a single substitution with D. Viruses with the single substitution with A exhibited slower growth and had lower nucleoprotein/M1 quantitative ratio in virions compared to the wild-type virus. In cells infected with a virus possessing the single substitution with A at position 77 or 78 (R77A or R78A, respectively), the mutated M1 localized in patches at the cell periphery where nucleoprotein and hemagglutinin colocalized more often than the wild-type did. Transmission electron microscopy showed that virus possessing M1 R77A or R78A, but not the wild-type virus, was present in vesicular structures, indicating a defect in virus assembly and/or budding. The M1 mutations that did not support virus generation exhibited an aberrant M1 intracellular localization and affected protein incorporation into virus-like particles. These results indicate that the basic amino acid stretch of M1 plays a critical role in influenza virus replication. M atrix protein M1 of influenza A virus is the most abundant protein in the virion and has multiple functions throughout the virus replication cycle. After internalization of the virus through receptor-mediated endocytosis, acidification of the virion interior, driven by the proton channel M2 (37), leads to the dissociation of viral ribonucleoprotein (vRNP) from M1 and vRNP release into the cytoplasm (4,15,25,37,45). vRNPs are then imported into the nucleus. In the nucleus, the viral RNA (vRNA) is transcribed and replicated by the vRNA polymerase subunits PB1, PB2, and PA, along with a nucleoprotein NP. Viral mRNAs are transported into the cytoplasm and translated into proteins. The polymerase subunits and NP are imported into the nucleus, synthesize vRNAs, and form vRNPs. M1 is also imported into the nucleus during the late stages of viral replication cycle and associates with the newly formed vRNPs (4,35,39). The vRNP-M1 complex, in association with NS2, is exported from the nucleus to the cytoplasm (4,5,16,25,28,33,44) and is then transported to the plasma membrane, where assembly of the viral internal components and viral envelope proteins are completed, and virions bud from the cell surface. Thus, many of the M1 functions are mediated by its binding to vRNPs (2,8,11,35,38,46,48,52,54): M1 inhibits vRNA transcription and/or replication (2,11,36,48,(54)(55)(56) and controls the nuclear export of v...