Although human immunodeficiency virus type 1 (HIV-1) is generally thought to assemble at the plasma membrane of infected cells, virions have been observed in intracellular compartments in macrophages. Here, we investigated virus assembly in HIV-1–infected primary human monocyte-derived macrophages (MDM). Electron microscopy of cryosections showed virus particles, identified by their morphology and positive labeling with antibodies to the viral p17, p24, and envelope proteins, in intracellular vacuoles. Immunolabeling demonstrated that these compartments contained the late endosomal marker CD63, which was enriched on vesicles within these structures and incorporated into the envelope of budding virions. The virus-containing vacuoles were also labeled with antibodies against LAMP-1, CD81, and CD82, which were also incorporated into the viral envelope. To assess the cellular source of infectious viruses derived from MDM, virus-containing media from infected cells were precipitated with specific antibodies. Only antibodies against antigens found in late endosomes precipitated infectious virus, whereas antibodies against proteins located primarily on the cell surface did not. Our data indicate that most of the infectious HIV produced by primary macrophages is assembled on late endocytic membranes and acquires antigens characteristic of this compartment. This notion has significant implications for understanding the biology of HIV and its cell–cell transmission.