The discovery and characterization of new inhibitors of HIV-1 reverse transcriptase (RT) is an important step toward understanding the mechanism of this multifunctional polymerase. We describe the identification of novel inhibitors of HIV-1 RT-catalyzed reactions utilizing a nucleic acid model system designed to mimic the essential features of DNA strand transfer reactions catalyzed by HIV-1 RT. This reaction requires the DNA polymerase and RNase H activities of RT, as well as the translocation of DNA from one template strand to another. In addition to the discovery of new inhibitors of DNA polymerase activity, two classes of inhibitors were identified that inhibit different steps of the DNA strand transfer reaction. One class of these, exemplified by actinomycin D, inhibits DNA strand transfer by interfering with the transfer of the DNA intermediate onto the acceptor template. The second class of strand transfer inhibitor, exemplified by the chlorophenylhydrazone of mesoxalic acid, was found to inhibit the ribonuclease H (RNase H) activity of HIV-1 RT under strand transfer conditions. This inhibitor is a potent and specific inhibitor of RNase H activity, which displays no inhibition of either DNA-dependent or RNA-dependent DNA polymerase activity. Together, these three inhibitors block different steps reverse transcription and will be valuable in studying the mechanism of multistep reactions such as DNA strand transfer. In addition, these new inhibitors of in vitro reverse transcription point to new strategies for the intervention of retroviral DNA replication and could be useful in the development of new HIV-1 therapeutic strategies.