The membrane-spanning domain (MSD) of the envelope (Env) glycoprotein from human (HIV) and simian immunodeficiency viruses plays a key role in anchoring the Env complex into the viral membrane but also contributes to its biological function in fusion and virus entry. In HIV type 1 (HIV-1), it has been predicted to span 27 amino acids, from lysine residue 681 to arginine 707, and encompasses an internal arginine at residue 694. By examining a series of C-terminal-truncation mutants of the HIV-1 gp41 glycoprotein that substituted termination codons for amino acids 682 to 708, we show that this entire region is required for efficient viral infection of target cells. Truncation to the arginine at residue 694 resulted in an Env complex that was secreted from the cells. In contrast, a region from residues 681 to 698, which contains highly conserved hydrophobic residues and glycine motifs and extends 4 amino acids beyond 694R, can effectively anchor the protein in the membrane, allow efficient transport to the plasma membrane, and mediate wild-type levels of cell-cell fusion. However, these fusogenic truncated Env mutants are inefficiently incorporated into budding virions. Based on the analysis of these mutants, a "snorkeling" model, in which the flanking charged amino acid residues at 681 and 694 are buried in the lipid while their side chains interact with polar head groups, is proposed for the HIV-1 MSD.