Membrane binding of the HIV-1 group-specific antigen (Gag) structural protein, a critical step in viral assembly at the plasma membrane, is mediated by the myristoylated, highly basic matrix (MA) domain, which interacts with negatively charged lipids in the inner leaflet. According to a popular model, virus particles bud from membrane rafts, microdomains enriched in cholesterol and high-melting phospholipids with higher order than found outside rafts. How Gag might recognize membrane rafts, if they exist in the inner leaflet, is unknown. Using a liposome flotation assay with proteins translated in vitro, we investigated whether Gag can sense the composition of the hydrophobic part of the bilayer, by fixing lipid head group composition and varying hydrophobic properties. In liposomes composed solely of phosphatidylserine and phosphatidylcholine, and with the same overall membrane negative charge, Gag strongly preferred lipids with both acyl chains unsaturated over those with only one chain unsaturated. Adding cholesterol increased Gag binding and led to closer packing of phospholipids. However, higher membrane order, as measured by electron spin resonance, was not correlated with increased Gag binding. Gag proteins from two other retroviruses gave similar results. These liposome binding preferences were qualitatively recapitulated by purified myristoylated HIV-1 MA. Phosphatidylinositol 4,5-bisphosphate and cholesterol enhanced binding in an additive manner. Taken together, these results show that Gag is sensitive both to the acyl chains of phosphatidylserine and to cholesterol concentration and other details of the membrane environment. These observations may help explain how retroviruses acquire a raft-like lipid composition.