Human endogenous retroviruses (HERVs), which are remnants of ancestral retroviruses integrated into the human genome, are defective in viral replication. Because activation of HERV-K and coexpression of this virus with HIV-1 have been observed during HIV-1 infection, it is conceivable that HERV-K could affect HIV-1 replication, either by competition or by cooperation, in cells expressing both viruses. In this study, we found that the release efficiency of HIV-1 Gag was 3-fold reduced upon overexpression of HERV-KCON Gag. In addition, we observed that in cells expressing Gag proteins of both viruses, HERV-KCON Gag colocalized with HIV-1 Gag at the plasma membrane. Furthermore, HERV-KCON Gag was found to coassemble with HIV-1 Gag, as demonstrated by (i) processing of HERV-KCON Gag by HIV-1 protease in virions, (ii) coimmunoprecipitation of virion-associated HERV-KCON Gag with HIV-1 Gag, and (iii) rescue of a late-domain-defective HERV-KCON Gag by wild-type (WT) HIV-1 Gag. Myristylation-deficient HERV-KCON Gag localized to nuclei, suggesting cryptic nuclear trafficking of HERV-K Gag. Notably, unlike WT HERV-KCONM Gag, HIV-1 Gag failed to rescue myristylation-deficient HERV-KCON Gag to the plasma membrane. Efficient colocalization and coassembly of HIV-1 Gag and HERV-K Gag also required nucleocapsid (NC). These results provide evidence that HIV-1 Gag heteromultimerizes with HERV-K Gag at the plasma membrane, presumably through NC-RNA interaction. Intriguingly, HERV-K Gag overexpression reduced not only HIV-1 release efficiency but also HIV-1 infectivity in a myristylation-and NC-dependent manner. Altogether, these results indicate that Gag proteins of endogenous retroviruses can coassemble with HIV-1 Gag and modulate the late phase of HIV-1 replication.