Lipid rafts, also known as detergent-resistant membranes (DRM), are microdomains in the plasma membrane enriched in sphingolipids and cholesterol (reviewed in [1, 2]). Human immunodeficiency virus 1 (HIV) buds via lipid rafts [3, 4]. However, the targeting of viral structural components to DRM and its consequences for viral replication are not understood. Moreover, the negative factor Nef from HIV increases viral infectivity (reviewed in [5, 6]). With no apparent differences in structural components and morphology between wild-type and DeltaNef virons, the latter viruses display less efficient reverse transcription in target cells. As Nef is expressed abundantly early in the viral replicative cycle [7], we hypothesized that Nef could affect viral morphogenesis and budding to render viruses more infectious. In this report, we demonstrated first that Nef increases viral budding from lipid rafts. Second, in the presence of Nef, viral envelopes contain more ganglioside (GM1), which is a major component of lipid rafts. This finding correlated directly with the increased infectivity of HIV. Finally, the depletion of exogenous and endogenous cholesterol biochemically and genetically, which disrupted lipid rafts, decreased viral infectivity only in the presence of Nef. Importantly, HIV lacking the nef gene remained unaffected by these manipulations. We conclude that lipids in virions are essential for viral infectivity. Thus, HIV becomes more infectious when it buds from lipid rafts, and Nef plays a major role in this process.