Alix plays a role in nucleocapsid release during viral infection, as does lysobisphosphatidic acid (LBPA). However, the mechanism remains unclear. Here we report the discovery of how LBPA is recognized within an exposed site in Alix Bro1 domain. Its all-helical triangle-shaped fold confers selectivity for LBPA over other negatively charged phospholipids, via a pair of hydrophobic residues in a flexible membrane insertion loop at the protein apex — loop that undergoes a conformational change upon membrane association. LBPA interactions also revealed a strict requirement for a structural calcium to bind tightly to the Bro1 domain near the lipid interaction site. Both LBPA- and calcium–binding are necessary for Alix association with endosomes in vivo and for mediating virus infection, as are the ESCRT-binding and dimerization capacity of Alix. We conclude that LBPA recruits Alix onto late endosomes via the calcium-bound Bro1 domain, triggering a conformational change in Alix to mediate membrane fusion and viral infection.