The release of human immunodeficiency virus type 1 (HIV-1) and of other retroviruses from certain cells requires the presence of distinct regions in Gag that have been termed late assembly (L) domains. HIV-1 harbors a PTAP-type L domain in the p6 region of Gag that engages an endosomal budding machinery through Tsg101. In addition, an auxiliary L domain near the C terminus of p6 binds to ALIX/AIP1, which functions in the same endosomal sorting pathway as Tsg101. In the present study, we show that the profound release defect of HIV-1 L domain mutants can be completely rescued by increasing the cellular expression levels of ALIX and that this rescue depends on an intact ALIX binding site in p6. Furthermore, the ability of ALIX to rescue viral budding in this system depended on two putative surface-exposed hydrophobic patches on its N-terminal Bro1 domain. One of these patches mediates the interaction between ALIX and the ESCRT-III component CHMP4B, and mutations which disrupt the interaction also abolish the activity of ALIX in viral budding. The ability of ALIX to rescue a PTAP mutant also depends on its C-terminal proline-rich domain (PRD), but not on the binding sites for Tsg101, endophilin, CIN85, or for the newly identified binding partner, CMS, within the PRD. Our data establish that ALIX can have a dramatic effect on HIV-1 release and suggest that the ability to use ALIX may allow HIV-1 to replicate in cells that express only low levels of Tsg101.