The synthesis of retroviral DNA is initiated near the 5' end of the RNA. DNA synthesis is transferred from the 5' end to the 3' end of viral RNA in an RNase H-dependent step. In the case of human immunodeficiency virus type 1 (HIV-1) (and certain other retroviruses that have complex secondary structures at the ends of the viral RNA), there is the possibility that DNA synthesis can lead to a self-priming event that would block viral replication. The extent of RNase H cleavage must be sufficient to allow the strand transfer reaction to occur, but not so extensive that self-priming occurs. We have used a series of model RNA substrates, with and without a 5' cap, to investigate the rules governing RNase H cleavage at the 5' end of the HIV-1 genome. These in vitro RNase H cleavage reactions produce an RNA fragment of the size needed to block self-priming but still allow strand transfer. The cleavages seen in vitro can be understood in light of the structure of HIV-1 reverse transcriptase in a complex with an RNA/DNA substrate.