Amantadine hydrochloride specifically blocks the release of virus particles from H7 influenza virus infected cells. This appears to be the direct consequence of an amantadine induced change in the haemagglutinin (HA) to its low pH conformation. The effect is indirect and mediated via interaction of the drug with the M2 protein since mutants altered in this component alone are insensitive to amantadine. The timing of drug action, some 15-20 min after synthesis, and its coincidence with proteolytic cleavage indicates that the modifications to HA occur late during transport but prior to insertion into the plasma membrane. Reversal by mM concentrations of amines and 0.1 microM monensin indicates that amantadine action causes a reduction in intravesicular pH which triggers the conformational change in HA. We conclude, therefore, that the function of M2 inhibited by amantadine is involved in counteracting the acidity of vesicular compartments of the exocytic pathway in infected cells and is important in protecting the structural integrity of the acid-sensitive glycoprotein.