Several critical steps in the replication cycle of human immunodeficiency virus type 1 (HIV-1) - entry, assembly and budding - are complex processes that take place at the plasma membrane of the host cell. A growing body of data indicates that these early and late steps in HIV-1 replication take place in specialized plasma membrane microdomains, and that many of the viral and cellular components required for entry, assembly, and budding are concentrated in these microdomains. In particular, a number of studies have shown that cholesterol- and sphingolipid-enriched microdomains known as lipid rafts play important roles in multiple steps in the virus replication cycle. In this review, we provide an overview of what is currently known about the involvement of lipids and membrane microdomains in HIV-1 replication.