To study how HIV-1 viral infectivity factor (Vif) mediates proteasome-dependent depletion of host factor APOBEC3G, functional and nonfunctional Vif-APOBEC3G interactions were correlated with subcellular localization. APOBEC3G localized throughout the cytoplasm and co-localized with gamma-tubulin, 20 S proteasome subunit, and ubiquitin at punctate cytoplasmic bodies that can be used to monitor the Vif-APOBEC3G interaction in the cell. Through immunostaining and live imaging, we showed that a substantial fraction of Vif localized to the nucleus, and this localization was impaired by deletion of amino acids 12-23. When co-expressed, Vif exhibited more pronounced localization to the cytoplasm and reduced the total cellular levels of APOBEC3G but rarely co-localized with APOBEC3G at cytoplasmic bodies. On the contrary, Vif(C114S), which is inactive but continues to interact with APOBEC3G, stably associated with APOBEC3G in the cytoplasm, resulting in complete co-localization at cytoplasmic bodies and a dose-dependent exclusion of Vif(C114S) from the nucleus. Following proteasome inhibition, cytoplasmic APOBEC3G levels increased, and both proteins co-accumulated nonspecifically into a vimentin-encaged aggresome. Furthermore in the presence or absence of APOBEC3G, Vif localization was significantly altered by proteasome inhibition, suggesting that aberrant localization may also contribute to the loss of Vif function. Finally mutations at Vif Ile(9) disrupted the ability of Vif or Vif(C114S) to coimmunoprecipitate and to co-localize with APOBEC3G, suggesting that the N terminus of Vif mediates interactions with APOBEC3G. Taken together, these results demonstrate that cytoplasmic Vif-APOBEC3G interactions are required but are not sufficient for Vif to modulate APOBEC3G and can be monitored by co-localization in vivo.