Direct lipid interactions control SARS-CoV-2 M protein conformational dynamics and virus assembly

M is the most abundant structural membrane protein in coronaviruses and is essential for the formation of infectious virus particles. SARS-CoV-2 M adopts two conformations, M_short and M_long, and regulated transition between states is hypothesized to coordinate viral assembly and budding. However, the factors that regulate M conformation and roles for each state are unknown. Here, we discover a direct M-sphingolipid interaction that controls M conformational dynamics, interaction with other structural proteins, and virus assembly. We show M binds Golgi-enriched anionic lipids including ceramide-1-phosphate (C1P). Molecular dynamics simulations show C1P interaction promotes a long to short transition and energetically stabilizes M_short. Cryo-EM structures show C1P specifically binds M_short at a conserved site bridging transmembrane and cytoplasmic regions. Disrupting M_short-C1P interaction alters M subcellular localization, reduces colocalization with Spike and E, and reduces virus-like particle formation and cell entry. Together, these results show endogenous signaling lipids regulate M structure and support a model in which M_short is stabilized in the early endomembrane system to organize other structural proteins prior to viral budding.