The DNA polymerase and RNase H activities of HIV reverse transcriptase are both essential for HIV replication. Although the two activities are both catalyzed by a single polypeptide, they are physically separate; i.e., the DNA polymerase resides in the N-terminal domain whereas the RNase H is localized in the C-terminal domain. The present study was undertaken to characterize the enzymatic properties of these two activities and to determine whether the two catalytic sites are also functionally distinct. We haveobserved that EGTA specifically stimulates, whereas CaCI2 selectively inhibits, the RNA-dependent DNA polymerase activity but that neither compound has any effect on the RNase H activity of a recombinant HIV reverse transcriptase. The stimulation of the DNA polymerase activity by EGTA is dependent on the Mg2+ concentration; the greatest stimulation is observed at low Mg2+ concentrations. Similarly, the inhibition of DNA polymerase activity by Ca2+ is influenced by Mg2+ concentration. Ca2+ inhibition can be reversed by increasing Mg2+ concentrations, suggesting the possibility that CaCI: inhibits the reverse transcriptase activity by competing for a metal-binding site on the enzyme. The pyrophosphate analogue phosphonoformate selectively inhibits the polymerase activity but not the RNase H activity of HIV reverse transcriptase. In constrast, the RNase H activity can be selectively inhibited by deoxyadenosine 5'-monophosphate, whereas the DNA polymerase activity is not inhibited. These results suggest that the DNA polymerase and RNase activities are not only physically separate but that they are also functionally distinct.