Viral matrix (M) proteins bind the nucleoprotein core (nucleocapsid) to host membranes during the process of virus assembly by budding. Previous studies using truncated M proteins had implicated the N-terminal 50 amino acids of the vesicular stomatitis virus M protein in binding both membranes and nucleocapsids and a sequence from amino acids 75-106 as an additional membrane binding region. Structure-based mutations were introduced into these two regions, and their effects on membrane association and incorporation into nucleocapsid-M protein complexes were determined using quantitative assays. The results confirmed that the N terminus of M protein is involved in association with plasma membranes as well as nucleocapsids, although these two activities were differentially affected by individual mutations. Mutations in the 75-106 region affected incorporation into nucleocapsid-M complexes but had only minor effects on association with membranes. The ability of site-specific mutant M proteins to complement growth of temperature-sensitive M mutant virus did not correlate well with the ability to associate with membranes or nucleocapsids, suggesting that complementation involves an additional activity of M protein. Mutants with similar abilities to associate with membranes and nucleocapsids but differing in complementation activity were incorporated into infectious cDNA clones. Infectious virus was repeatedly recovered containing mutant M proteins capable of complementation but was never recovered with mutant M proteins that lacked complementation activity, providing further evidence for a separate activity of M protein that is essential for virus replication.