We investigated the mechanism by which the cholesterol-binding compound amphotericin B methyl ester (AME) inhibits human immunodeficiency virus type 1 (HIV-1) particle production. We observed no significant effect of AME on Gag binding to the plasma membrane, Gag association with lipid rafts, or Gag multimerization, indicating that the mechanism of inhibition by AME is distinct from that by cholesterol depletion. Electron microscopy analysis indicated that AME significantly disrupts virion morphology. Interestingly, we found that AME does not inhibit the release of Vpu-defective HIV-1 or Vpu(-) retroviruses such as murine leukemia virus and simian immunodeficiency virus. We demonstrated that the ability of Vpu to counter the activity of CD317/BST-2/tetherin is markedly reduced by AME. These results indicate that AME interferes with the anti-CD317/BST-2/tetherin function of Vpu.