New inhibitors of influenza viruses are needed to combat the potential emergence of novel human influenza viruses. We have identified a class of small molecules that inhibit replication of influenza virus at picomolar concentrations in plaque reduction assays. The compound also inhibits replication of vesicular stomatitis virus. Time of addition and dilution experiments with influenza virus indicated that an early time point of infection was blocked and that inhibitor 136 tightly bound to virions. Using fluorescently labeled influenza virus, inhibition of viral fusion to cellular membranes by blocked lipid mixing was established as the mechanism of action for this class of inhibitors. Stabilization of the neutral pH form of hemagglutinin (HA) was ruled out by trypsin digestion studies in vitro and with conformation specific HA antibodies within cells. Direct visualization of 136 treated influenza virions at pH 7.5 or acidified to pH 5.0 showed that virions remain intact and that glycoproteins become disorganized as expected when HA undergoes a conformational change. This suggests that exposure of the fusion peptide at low pH is not inhibited but lipid mixing is inhibited, a different mechanism than previously reported fusion inhibitors. We hypothesize that this new class of inhibitors intercalate into the virus envelope altering the structure of the viral envelope required for fusion to cellular membranes.