Recently proposed models that have gained wide acceptance posit that HIV-1 virion morphogenesis is initiated by targeting the major structural protein (Gag) to late endosomal membranes. Thereafter, late endosome-based secretory pathways are thought to deliver Gag or assembled virions to the plasma membrane (PM) and extracellular milieu. We present several findings that are inconsistent with this model. Specifically, we demonstrate that HIV-1 Gag is delivered to the PM, and virions are efficiently released into the extracellular medium, when late endosome motility is abolished. Furthermore, we show that HIV-1 virions are efficiently released when assembly is rationally targeted to the PM, but not when targeted to late endosomes. Recently synthesized Gag first accumulates and assembles at the PM, but a proportion is subsequently internalized via endocytosis or phagocytosis, thus accounting for observations of endosomal localization. We conclude that HIV-1 assembly is initiated and completed at the PM, and not at endosomal membranes.