The PPPY motif in the matrix (MA) domain of human T-cell leukemia virus type 1 (HTLV-1) Gag associates with WWP1, a member of the HECT domain containing family of E3 ubiquitin ligases. Mutation of the PPPY motif arrests particle assembly at an early stage and abolishes ubiquitination of MA. Similar effects are seen when Gag is expressed in the presence of a truncated form of WWP1 that lacks the catalytically active HECT domain (C2WW). To understand the role of ubiquitination in budding, we mutated the four lysines in MA to arginines and identified lysine 74 as the unique site of ubiquitination. Virus-like particles produced by the K74R mutant did not contain ubiquitinated MA and showed a fourfold reduction in the release of infectious particles. Furthermore, the K74R mutation rendered assembly hypersensitive to C2WW inhibition; K74R Gag budding was inhibited at significantly lower levels of expression of C2WW compared with wild-type Gag. This finding indicates that the interaction between Gag and WWP1 is required for functions other than Gag ubiquitination. Additionally, we show that the PPPY(-) mutant Gag exerts a strong dominant-negative effect on the budding of wild-type Gag, further supporting the importance of recruitment of WWP1 to achieve particle assembly.