Assembly and budding of influenza virus proceeds in the viral budozone, a domain in the plasma membrane with characteristics of cholesterol/sphingolipid-rich membrane rafts. The viral transmembrane glycoproteins hemagglutinin (HA) and neuraminidase (NA) are intrinsically targeted to these domains, while M2 is seemingly targeted to the edge of the budozone. Virus assembly is orchestrated by the matrix protein M1, binding to all viral components and the membrane. Budding progresses by protein- and lipid-mediated membrane bending and particle scission probably mediated by M2. Here, we summarize the experimental evidence for this model with emphasis on the raft-targeting features of HA, NA, and M2 and review the functional importance of raft domains for viral protein transport, assembly and budding, environmental stability, and membrane fusion.