Reverse transcriptase-mediated RNA displacement synthesis is required for DNA polymerization through the base-paired stem portions of secondary structures present in retroviral genomes. These regions of RNA duplex often possess single unpaired nucleotides, or "bulges," that disrupt contiguous base pairing. By using well defined secondary structures from the human immunodeficiency virus, type 1 (HIV-1), genome, we demonstrate that removal of these bulges either by deletion or by introducing a complementary base on the opposing strand results in increased pausing at specific positions within the RNA duplex. We also show that the HIV-1 nucleocapsid protein can increase synthesis through the pause sites but not as efficiently as when a bulge residue is present. Finally, we demonstrate that removing a bulge increases the proportion of strand transfer events to an acceptor template that occur prior to complete replication of a donor template secondary structure. Together our data suggest a role for bulge nucleotides in enhancing synthesis through stable secondary structures and reducing strand transfer.