Human immunodeficiency virus type-1 Tat has been proposed to play a role in the regulation of reverse transcription. We previously demonstrated that wild-type Tat can augment viral infectivity by suppressing the reverse transcriptase (RT) reaction at late stages of the viral life cycle in order to prevent the premature synthesis of potentially deleterious viral DNA products. Here we have performed a detailed analysis of the cell-free reverse transcription reaction to elucidate the mechanism(s) whereby Tat can affect this process. Our results show that Tat can suppress nonspecific DNA elongation while moderately affecting the specific initiation stage of reverse transcription. In addition, Tat has an RNA-annealing activity and can promote the placement of tRNA onto viral RNA. This points to a functional homology between Tat and the viral nucleocapsid (NC) protein that is known to be directly involved in this process. Experiments using a series of mutant Tat proteins revealed that the cysteine-rich and core domains of Tat are responsible for suppression of DNA elongation, while each of the cysteine-rich, core, and basic domains, as well as a glutamine-rich region in the C-terminal domain, are important for the placement of tRNA onto the viral RNA genome. These results suggest that Tat can play at least two different roles in the RT reaction, i.e., suppression of DNA polymerization and placement of tRNA onto viral RNA. We believe that the first of these activities of Tat may contribute to the overall efficiency of reverse transcription of the viral genome during a new round of infection as well as to enhanced production of infectious viral particles. We hypothesize that the second activity, illustrating functional homology between Tat and NC, suggests a potential role for NC in the displacement of Tat during viral maturation.