Matrix protein (M1) of influenza virus is a bifunctional protein that mediates the encapsidation of RNA-nucleoprotein cores into the membrane envelope. It is therefore required that M1 binds both membrane and RNA simultaneously. The X-ray crystal structure of the N-terminal portion of type A influenza virus M1-amino acid residues 2-158-has been determined at 2.08 A resolution at pH 4.0. The protein forms a dimer. A highly positively charged region on the dimer surface is suitably positioned to bind RNA while the hydrophobic surface opposite the RNA binding region may be involved in interactions with the membrane. The membrane-binding hydrophobic surface could be buried or exposed after a conformational change.