Sphingolipid-cholesterol rafts are microdomains in biological membranes with liquid-ordered phase properties which are implicated in membrane traffic and signalling events. We have used influenza virus haemagglutinin (HA) as a model protein to analyse the interaction of transmembrane proteins with these microdomains. Here we demonstrate that raft association is an intrinsic property encoded in the protein. Mutant HA molecules with foreign transmembrane domain (TMD) sequences lose their ability to associate with the lipid microdomains, and mutations in the HA TMD reveal a requirement for hydrophobic residues in contact with the exoplasmic leaflet of the membrane. We also provide experimental evidence that cholesterol is critically required for association of proteins with lipid rafts. Our data suggest that the binding to specific membrane domains can be encoded in transmembrane proteins and that this information will be used for polarized sorting and signal transduction processes.