The influenza A M2 protein forms a proton channel for virus infection and also mediates virus assembly and budding. The minimum protein length that encodes both functions contains the transmembrane (TM) domain (roughly residues 22–46) for the amantadine-sensitive proton-channel activity and an amphipathic cytoplasmic helix (roughly residues 45–62) for curvature induction and virus budding. However, structural studies involving the TM domain with or without the amphipathic helix differed on the drug-binding site. Here we use solid-state NMR spectroscopy to determine the amantadine binding site in the cytoplasmic-helix-containing M2(21–61). 13C–2H distance measurements of 13C-labeled protein and 2H-labeled amantadine showed that in 1,2-dimyristoyl-sn-glycero-3-phosphocholine (DMPC) bilayers, the first equivalent of drug bound S31 inside the M2(21–61) pore, similar to the behavior of M2 transmembrane peptide (M2TM) in DMPC bilayers. The nonspecific surface site of D44 observed in M2TM is disfavored in the longer peptide. Thus, the pharmacologically relevant drug-binding site in the fully functional M2(21–61) is S31 in the TM pore. Interestingly, when M2(21–61) was reconstituted into a virus-mimetic membrane containing 30% cholesterol, no chemical shift perturbation was observed for pore-lining residues, whereas M2TM in the same membrane exhibited drug-induced chemical shift changes. Reduction of the cholesterol level and the use of unsaturated phospholipids shifted the conformational equilibrium of M2TM fully to the bound state but did not rescue drug binding to M2(21–61). These results suggest that the amphipathic helix, together with cholesterol, modulates the ability of the TM helix to bind amantadine. Thus, the M2 protein interacts with the lipid membrane and small-molecule inhibitors in a complex fashion, and a careful examination of the environmental dependence of the protein conformation is required to fully understand the structure–function relation of this protein.