Integration of retroviral DNA into the host chromosome requires a virus-encoded integrase (IN). IN recognizes, cuts and then joins specific viral DNA sequences (LTR ends) to essentially random sites in host DNA. We have used computer-assisted protein alignments and mutagenesis in an attempt to localize these functions within the avian retroviral IN protein. A comparison of the deduced amino acid sequences for 80 retroviral/retrotransposon IN proteins reveals strong conservation of an HHCC N-terminal 'Zn finger'-like domain, and a central D(35)E region which exhibits striking similarities with sequences deduced for bacterial IS elements. We demonstrate that the HHCC region is not required for DNA binding, but contributes to specific recognition of viral LTRs in the cutting and joining reactions. Deletions which extend into the D(35)E region destroy the ability of IN to bind DNA. Thus, we propose that the D(35)E region may specify a DNA-binding/cutting domain that is conserved throughout evolution in enzymes with similar functions.