The Gag protein of human immunodeficiency virus type 1 (HIV-1) associates with the envelope protein complex during virus assembly. The available evidence indicates that this interaction involves recognition of the gp41 cytoplasmic tail (CT) by the matrix protein (MA) region of Pr55^Gag. Here we show that substitution of Asp for Leu at position 49 (L49D) in MA results in a specific reduction in particle-associated gp120 without affecting the levels of gp41. Mutant virions were markedly reduced in single-cycle infectivity despite a relatively modest defect in fusion with target cells. Studies with HIV-1 particles containing decreased levels of envelope proteins suggested that the L49D mutation also inhibits a postentry step in infection. Truncation of the gp41 tail, or pseudotyping by vesicular stomatitis virus glycoprotein, restored both the fusion and infectivity of L49D mutant virions to wild-type levels. Truncation of gp41 also resulted in equivalent levels of gp120 on particles with and without the MA mutation and enhanced the replication of the L49D mutant virus in T cells. The impaired fusion and infectivity of L49D mutant particles were also complemented by a single point mutation in the gp41 CT that disrupted the tyrosine-containing endocytic motif. Our results suggest that an altered interaction between the MA domain of Gag and the gp41 cytoplasmic tail leads to dissociation of gp120 from gp41 during HIV-1 particle assembly, thus resulting in impaired fusion and infectivity.