Highly pathogenic Nipah virus (NiV) infections are transmitted via airway secretions and urine, commonly via the respiratory route. Epithelial surfaces represent important replication sites in both primary and systemic infection phases. NiV entry and spread from polarized epithelial cells therefore determine virus entry and dissemination within a new host and influence virus shedding via mucosal surfaces in the respiratory and urinary tract. To date, there is no knowledge regarding the entry and exit sites of NiV in polarized epithelial cells. In this report, we show for the first time that NiV can infect polarized kidney epithelial cells (MDCK) from both cell surfaces, while virus release is primarily restricted to the apical plasma membrane. Substantial amounts of basolateral infectivity were detected only after infection with high virus doses, at time points when the integrity of the cell monolayer was largely disrupted as a result of cell-to-cell fusion. Confocal immunofluorescence analyses of envelope protein distribution at early and late infection stages suggested that apical virus budding is determined by the polarized sorting of the NiV matrix protein, M. Studies with stably M-expressing and with monensin-treated cells furthermore demonstrated that M protein transport is independent from the glycoproteins, implying that the M protein possesses an intrinsic apical targeting signal.