Human immunodeficiency virus (HIV) type 1 particles assemble at the plasma membrane of cells in a manner similar to that of the type C oncoretroviruses. The Pr55(Gag) molecule directs the assembly process and is sufficient for particle assembly in the absence of all other viral gene products. The I domain is an assembly domain that has been previously localized to the nucleocapsid (NC) region of Gag. In this study we utilized a series of Gag-green fluorescent protein (GFP) fusion proteins to precisely identify sequences that constitute the N-terminal I domain of Pr55(Gag). The minimal sequence required for the I domain was localized to the extreme N terminus of NC. Two basic residues (arginine 380 and arginine 384) within the initial seven residues of NC were found to be critical for the function of the N-terminal I domain. The presence of positive charge alone in these two positions, however, was not sufficient to mediate the formation of dense Gag particles. The I domain was required for the formation of detergent-resistant complexes of Gag protein, and confocal microscopy demonstrated that the I domain was also required for the formation of punctate foci of Gag proteins at the plasma membrane. Electron microscopic analysis of cells expressing Gag-GFP fusion constructs with an intact I domain revealed numerous retrovirus-like particles (RVLPs) budding from the plasma membrane, while I domain-deficient constructs failed to generate visible RVLPs. These results provide evidence that Gag-Gag interactions mediated by the I domain play a central role in the assembly of HIV particles.