Animal cells bud exosomes and microvesicles (EMVs) from endosome and plasma membranes. The combination of higher-order oligomerization and plasma membrane binding is a positive budding signal that targets diverse proteins into EMVs and retrovirus particles. Here we describe an inhibitory budding signal (IBS) from the human immunodeficiency virus (HIV) Gag protein. This IBS was identified in the spacer peptide 2 (SP2) domain of Gag, is activated by C-terminal exposure of SP2, and mediates the severe budding defect of p6-deficient and PTAP-deficient strains of HIV. This IBS also impairs the budding of CD63 and several other viral and nonviral EMV proteins. The IBS does not prevent cargo delivery to the plasma membrane, a major site of EMV and virus budding. However, the IBS does inhibit an interaction between EMV cargo proteins and VPS4B, a component of the endosomal sorting complexes required for transport (ESCRT) machinery. Taken together, these results demonstrate that inhibitory signals can block protein and virus budding, raise the possibility that the ESCRT machinery plays a role in EMV biogenesis, and shed new light on the role of the p6 domain and PTAP motif in the biogenesis of HIV particles.