Acquired immunodeficiency syndrome (AIDS) is a leading cause of disease in the world today and is caused by HIV-1. Understanding the viral replication cycle is pertinent to understanding the disease and in trying to develop novel therapeutics. Our laboratory studies assembly and release of HIV-1, specifically of the major structural protein of the virus, Gag. Recently elements of the machinery required for viral budding has been identified, but what defines the site of viral release from the cell and how Gag traffic to it are unknown. We have described a role for the cellular endocytic machinery, specifically the clathrin-associated adaptor AP-2, in the regulation of Gag release from the cell. First, we identified a direct interaction between Gag and AP-2 and observed that disruption of this interaction resulted in an increase in Gag release. This suggested that AP-2 is involved in limiting the amount of Gag released. We also observed that the virions released from AP-2 mutant cells incorporated less Env and were less infectious, suggesting that AP-2 is involved in Gag assembly with Env. Moreover, the subcellular distribution of Gag altered when the interaction with AP-2 was disrupted, either by mutating AP-2 or by mutating Gag at the AP-2 binding site, suggesting that AP-2 may not only regulate the rate of release but also of Gag targeting to the plasma membrane. Together these data show AP-2 plays a regulatory role in Gag assembly and release. We next attempted to define the mechanism of regulation for AP-2 in the viral assembly and release process. Since others found that Gag is internalized and since the major cellular role for AP-2 is clathrin-mediated endocytosis we tested to see if AP-2 was responsible for internalizing Gag as a means of removing it from the plasma membrane to avoid inefficient release. Using AP-2 knockdown cells we observed a dramatic decrease in Gag internalization, although it seems to occur through an indirect interaction. We also observed an inhibition in Gag internalization when the Vps protein AIP1/Alix was overexpressed, which is required for efficient Gag release, suggesting a competition between the endocytic machinery and the budding machinery. We hypothesize that AP-2 regulates Gag release by removing it from the cell surface. When the budding machinery, such as AIP1/Alix, is present it competes with AP-2 for Gag to allow for Gag release.