APOBEC3G (A3G) is a potent antiretroviral deoxycytidine deaminase that, when incorporated into HIV virions, hypermutates nascent viral DNA formed during reverse transcription. HIV Vif counters the effect of A3G by depleting intracellular stores of the enzyme, thereby blocking its virion incorporation. Through pulse-chase analyses, we demonstrate that virion A3G is mainly recruited from the cellular pool of newly synthesized enzyme compared to older "mature" A3G already residing in high-molecular-mass RNA-protein complexes. Virion-incorporated A3G forms a large complex with viral genomic RNA that is clearly distinct from cellular HMM A3G complexes, as revealed by both gel filtration and biochemical fractionation. Unexpectedly, the enzymatic activity of virion-incorporated A3G is lost upon its stable association with HIV RNA. The activity of the latent A3G enzyme is ultimately restored during reverse transcription by the action of HIV RNase H. Degradation of the viral genomic RNA by RNase H not only generates the minus-strand DNA substrate targeted by A3G for hypermutation but also removes the inhibitory RNA bound to A3G, thereby enabling its function as a deoxycytidine deaminase. These findings highlight an unexpected interplay between host and virus where initiation of antiviral enzymatic activity is dependent on the action of an essential viral enzyme.