The ESCRT machinery functions in topologically equivalent membrane fission events, namely multivesicular body formation, the terminal stages of cytokinesis and HIV-1 release. Here, we show that the ESCRT-III-binding protein Alix is recruited to the midbody of dividing cells through binding Cep55 via an evolutionarily conserved peptide. Disruption of Cep55/Alix/ESCRT-III interactions causes formation of aberrant midbodies and cytokinetic failure, demonstrating an essential role for these proteins in midbody morphology and cell division. We also show that the C terminus of Alix encodes a multimerization activity that is essential for its function in Alix-dependent HIV-1 release and for interaction with Tsg101. Last, we demonstrate that overexpression of Chmp4b and Chmp4c differentially inhibits HIV-1 release and cytokinesis, suggesting possible reasons for gene expansion within the mammalian Class E VPS pathway.