Vesicular stomatitis virus matrix protein (VSV M) has been shown to inhibit both transcription and nucleocytoplasmic transport. We have isolated a mutant form of M, termed M(D), lacking both inhibitory activities. HeLa cells expressing M, but not M(D), accumulate polyadenylated RNAs within the nucleus. Concomitantly, a fraction of M, but not of the M(D) mutant, localizes at the nuclear rim. Additionally, the nucleoporin Nup98 specifically interacts with M but not with M(D). In Nup98(-/-) cells, both the levels of M at the nuclear envelope and its inhibitory effects on host cell-directed expression of reporter genes were significantly reduced. Together, our data demonstrate that VSV M inhibits host cell gene expression by targeting a nucleoporin and primarily blocking nuclear export.