The human immunodeficiency virus (HIV) and acquired immunodeficiency syndrome (AIDS) pandemic is amongst the most important current worldwide public health threats. While much research has been focused on AIDS vaccines that target the surface viral envelope (Env) protein, including gp120 and the gp41 ectodomain, the C-terminal tail (CTT) of gp41 has received relatively little attention. Despite early studies highlighting the immunogenicity of a particular CTT sequence, the CTT has been classically portrayed as a type I membrane protein limited to functioning in Env trafficking and virion incorporation. Recent studies demonstrate, however, that the Env CTT has other important functions. The CTT has been shown to additionally modulate Env ectodomain structure on the cell and virion surface, affect Env reactivity and viral sensitivity to conformation-dependent neutralizing antibodies, and alter cell-cell and virus-cell fusogenicity of Env. This review provides an overview of the Env structure and function with a particular emphasis on the CTT and recent studies that highlight its functionally rich nature.