The cytoplasmic tail of the influenza A virus M2 protein is highly conserved among influenza A virus isolates. The cytoplasmic tail appears to be dispensable with respect to the ion channel activity associated with the protein but important for virus morphology and the production of infectious virus particles. Using reverse genetics and transcomplementation assays, we demonstrate that the M2 protein cytoplasmic tail is a crucial mediator of infectious virus production. Truncations of the M2 cytoplasmic tail result in a drastic decrease in infectious virus titers, a reduction in the amount of packaged viral RNA, a decrease in budding events, and a reduction in budding efficiency. The M1 protein binds to the M2 cytoplasmic tail, but the M1 binding site is distinct from the sequences that affect infectious virus particle formation. Influenza A virus strains A/Udorn/72 and A/WSN/33 differ in their requirements for M2 cytoplasmic tail sequences, and this requirement maps to the M1 protein. We conclude that the M2 protein is required for the formation of infectious virus particles, implicating the protein as important for influenza A virus assembly in addition to its well-documented role during virus entry and uncoating.