The neuronal damage characteristic of HIV-1-associated dementia is inflicted by HIV-1 infected brain macrophages through their production of neurotoxic viral and inflammatory proteins. The identification and characterization of macrophage-specific host factors that facilitate HIV replication is a crucial step toward developing more specific and effective antiretroviral therapies to treat HAD. We previously defined Annexin 2 (Anx2) as an HIV Gag binding partner in human monocyte-derived macrophages (MDMs) that promotes proper viral assembly. Anx2, a calcium-dependent membrane-binding protein that can aggregate phospholipid-containing lipid rafts, is expressed to high levels in macrophages, but not in T lymphocytes or the 293T cell line. In these experiments, we use bimolecular fluorescence complementation in the 293T cell model to map the Anx2 binding site to the N-terminal matrix domain of Gag. We again apply this system to address the functional role of Anx2 in HIV-1 replication and show that Anx2 and HIV-1 Gag interact at the phosphatidylinositol (4,5) bisphosphate-containing lipid raft membrane domains at which Gag mediates viral assembly. Furthermore, we demonstrate that Anx2 expression in 293T cells increases Gag processing and HIV-1 production. These data provide new evidence that Anx2, by interacting with Gag at the membranes that support viral assembly, functions in the late stages of HIV-1 replication.