Morphogenesis of infectious HIV-1 involves budding of immature virions followed by proteolytic disassembly of the Gag protein shell and subsequent assembly of processed capsid proteins (CA) into the mature HIV-1 core. The dimeric interface between C-terminal domains of CA (C-CA) has been shown to be important for both immature and mature assemblies. We previously reported a CA-binding peptide (CAI) that blocks both assembly steps in vitro. The three-dimensional structure of the C-CA/CAI complex revealed an allosteric effect of CAI that alters the C-CA dimer interface. Based on this structure, we now investigated the phenotypes of mutations in the binding pocket. CA variants carrying mutations Y169A, L211A, or L211S had a reduced affinity for CAI and were unable to form mature-like particles in vitro. These mutations also blocked morphological conversion to mature virions in tissue culture and abolished infectivity. X-ray crystallographic analyses of the variant C-CA domains revealed that these alterations induced the same allosteric change at the dimer interface observed in the C-CA/CAI complex. These results point to a role of key interactions between conserved amino acids in the CAI binding pocket of C-CA in maintaining the correct conformation necessary for mature core assembly.