The nucleic acid chaperone activity of the human immunodeficiency virus type-1 (HIV-1) nucleocapsid protein (NC) plays an important role in the retroviral life cycle, in part, by facilitating numerous nucleic acid rearrangements throughout the reverse transcription process. Recent studies have identified duplex destabilization and nucleic acid aggregation as the two major components of NC's chaperone activity. In order to better understand the contribution of the functional domains of NC to these two activities, we used optical tweezers to stretch single lambda DNA molecules through the helix-coil transition in the presence of wild-type or mutant HIV-1 NC. Protein-induced duplex destabilization was measured directly as an average decrease of the force-induced melting free energy, while NC's ability to facilitate strand annealing was determined by the amount of hysteresis in the DNA stretch-relax cycle. By studying zinc-free variants of full-length and truncated NC, the relative contributions of NC's zinc fingers and N-terminal basic domain to the two major components of chaperone activity were elucidated. In addition, examination of NC variants containing mutations affecting one or both zinc finger motifs showed that effective strand annealing activity is correlated with NC's ability to rapidly bind and dissociate from nucleic acids. NC variants with slow on/off rates are inefficient in strand annealing, even though they may still be capable of high affinity nucleic acid binding, duplex destabilization, and/or nucleic acid aggregation. Taken together, these observations establish the rapid kinetics of protein-nucleic acid interaction as another major component of NC's chaperone function.