The Env protein from gibbon ape leukemia virus (GaLV) has been shown to be incompatible with human immunodeficiency virus type 1 (HIV-1) in the production of infectious pseudotyped particles. This incompatibility has been mapped to the C-terminal cytoplasmic tail of GaLV Env. Surprisingly, we found that the HIV-1 accessory protein Vpu modulates this incompatibility. The infectivity of HIV-1 pseudotyped with murine leukemia virus (MLV) Env was not affected by Vpu. However, the infectivity of HIV-1 pseudotyped with an MLV Env with the cytoplasmic tail from GaLV Env (MLV/GaLV Env) was restricted 50- to 100-fold by Vpu. A Vpu mutant containing a scrambled membrane-spanning domain, Vpu(RD), was still able to restrict MLV/GaLV Env, but mutation of the serine residues at positions 52 and 56 completely alleviated the restriction. Loss of infectivity appeared to be caused by reduced MLV/GaLV Env incorporation into viral particles. The mechanism of this downmodulation appears to be distinct from Vpu-mediated CD4 downmodulation because Vpu-expressing cells that failed to produce infectious HIV-1 particles nonetheless continued to display robust surface MLV/GaLV Env expression. In addition, if MLV and HIV-1 were simultaneously introduced into the same cells, only the HIV-1 particle infectivity was restricted by Vpu. Collectively, these data suggest that Vpu modulates the cellular distribution of MLV/GaLV Env, preventing its recruitment to HIV-1 budding sites.