Rapamycin and its derivatives are specific inhibitors of mammalian target of rapamycin (mTOR) kinase and, as a result, are well-established immunosuppressants and antitumorigenic agents. Additionally, this class of drug promotes gene delivery by facilitating lentiviral vector entry into cells, revealing its potential to improve gene therapy efforts. However, the precise mechanism was unknown. Here, we report that mTOR inhibitor treatment results in down-regulation of the IFN-induced transmembrane (IFITM) proteins. IFITM proteins, especially IFITM3, are potent inhibitors of virus–cell fusion and are broadly active against a range of pathogenic viruses. We found that the effect of rapamycin treatment on lentiviral transduction is diminished upon IFITM silencing or knockout in primary and transformed cells, and the extent of transduction enhancement depends on basal expression of IFITM proteins, with a major contribution from IFITM3. The effect of rapamycin treatment on IFITM3 manifests at the level of protein, but not mRNA, and is selective, as many other endosome-associated transmembrane proteins are unaffected. Rapamycin-mediated degradation of IFITM3 requires endosomal trafficking, ubiquitination, endosomal sorting complex required for transport (ESCRT) machinery, and lysosomal acidification. Since IFITM proteins exhibit broad antiviral activity, we show that mTOR inhibition also promotes infection by another IFITM-sensitive virus, Influenza A virus, but not infection by Sendai virus, which is IFITM-resistant. Our results identify the molecular basis by which mTOR inhibitors enhance virus entry into cells and reveal a previously unrecognized immunosuppressive feature of these clinically important drugs. In addition, this study uncovers a functional convergence between the mTOR pathway and IFITM proteins at endolysosomal membranes.