Human immunodeficiency virus type 1 (HIV-1) reverse transcriptase (RT) is a putative source of the genomic hypermutation that promotes rapid evolution of HIV-1. To understand the molecular strategies that create a highly mutagenic DNA polymerase active site in HIV-1 RT, we investigated the roles of four residues in the beta 8-alpha E loop. Gln151, which interacts with the sugar of the incoming dNTP, and Lys154, which interacts with the template, yielded site-directed mutants with increased fidelity, suggesting that these residues are directly involved in the mutagenic architecture of the active site. Mutations at Gln151 and Lys154 also reduced processivity. Q151N RT showed enhanced ability to discriminate between TTP and AZT triphosphate, consistent with the observation that the Q151M mutation confers AZT resistance in vivo. Mutations at Gly152 greatly decreased RT activity; molecular modeling suggests that Gly152 is critical for the proper geometric alignment that permits base-pairing of the incoming dNTP with the template. Mutations at Trp153 reduced the expression level, and presumably the stability, of RT proteins in bacteria. These observations support the conclusion that interactions of active site residues in the beta 8-alpha E loop with incoming dNTPs and the template are determinants of the accuracy, processivity, and substrate selectivity of HIV-1 RT.