Nipah virus (NiV) causes fatal encephalitic infections in humans. To characterize the role of the matrix (M) protein in the viral life cycle, we generated a reverse genetics system based on NiV strain Malaysia. Using an enhanced green fluorescent protein (eGFP)-expressing M protein-deleted NiV, we observed a slightly increased cell-cell fusion, slow replication kinetics, and significantly reduced peak titers compared to the parental virus. While increased amounts of viral proteins were found in the supernatant of cells infected with M-deleted NiV, the infectivity-to-particle ratio was more than 100-fold reduced, and the particles were less thermostable and of more irregular morphology. Taken together, our data demonstrate that the M protein is not absolutely required for the production of cell-free NiV but is necessary for proper assembly and release of stable infectious NiV particles.