The late assembly (L) domain of retrovirus Gag, required in the final steps of budding for efficient exit from the host cell, is thought to mediate its function through interaction with unknown cellular factors. Here, we report the identification of the Nedd4-like family of E3 ubiquitin protein ligases as proteins that specifically interact with the Rous sarcoma virus (RSV) L domain in vitro and in vivo. We screened a chicken embryo cDNA expression library by using a peptide derived from the RSV p2b sequence, isolating two unique partial cDNA clones. Neither clone interacted with a peptide containing mutations known to disrupt in vivo RSV L domain function or with human immunodeficiency virus type 1 (HIV-1) and equine infectious anemia virus (EIAV) L domain-derived peptides. The WW domain region of one of the clones, late domain-interacting protein 1 (LDI-1), but not the C2 domain, bound RSV Gag and inhibited RSV Gag budding from human 293 cells in a dominant-negative manner, functionally implicating LDI-1 in RSV particle budding from cells. RSV Gag can be coimmune precipitated from cell extracts with an antisera directed at an exogenously expressed hemagglutinin (HA)-tagged LDI-1 or endogenous Nedd4 proteins. These findings mechanistically link the cellular ubiquitination pathway to retrovirus budding.