Vesicular stomatitis virus buds from domains of the plasma membrane that have a unique protein and lipid composition. Fluorescence digital imaging microscopy and resonance energy transfer were used to determine how the two viral envelope-associated proteins, the G and the M proteins, could alter the lateral distribution of lipids in large unilamellar vesicles and form domains. The G protein formed large domains in vesicles containing phosphatidic acid but not with phosphatidylserine, while the M protein formed domains enriched in both acidic phospholipids. Domains enriched in sphingomyelin were observed only when both the G protein and the M protein were present in vesicles containing phosphatidic acid. Phosphatidylcholine and gramicidin (chosen to represent a host membrane protein) were excluded from the domains. Cholesterol was induced to partition into the domains only in vesicles containing phosphatidic acid and sphingomyelin along with both of the proteins. Phosphatidylethanolamine was not enriched or depleted in the domains. Domains of similar composition were formed using vesicles made from dioleoylphospholipids and the lipids extracted from BHK-21 plasma membranes, indicating that the fatty acid composition was not as important as the polar head groups of the phospholipids. The phospholipid and cholesterol compositions of the domains formed by the G and the M proteins in vesicles were very similar to the composition of the viral envelope, suggesting that the domains represent the areas in the plasma membrane where the virus buds. This study provides a model for selective lipid and protein sorting that occurs in biological membranes.