Recent studies with isolated M protein from influenza virus have shown that the protein has a high affinity for lipid. The ability of M to partition into lipid vesicles merely by shaking vesicles and M together is suggestive evidence that the protein could be interacting with the lipid in the virus particle. A more direct analysis was carried our here to determine whether M is in contact with the viral lipid in situ, by using the photoactivatable hydrophobic probe, pyrenesulfonyl azide. Covalent linkage of this probe to M indicated that a segment of M residues with in the virus membrane in contact with the lipid bilayer. M inserted into lipid vesicles at two locations on the molecule. A major insertion into lipid occurred in the middle of the molecule where a large cluster of 20 hydrophobic and neutral amino acids occurs. A second insertion occurred approximately one fourth in from the amino terminus, where a smaller segment of 13 uncharged amino acids is found. Confirmation that M inserted into lipid at these locations came also from results with cyanogen bromide fragments of M. Of the 12 to 13 fragments produced, 3 specifically bound to lipid vesicles. These were the first, second, and third contiguous segments beginnings at the amino terminus and containing the two hydrophobic areas noted above.