Allosteric HIV-1 integrase inhibitors (ALLINIs) have recently emerged as a promising class of antiretroviral agents and are currently in clinical trials. In infected cells, ALLINIs potently inhibit viral replication by impairing virus particle maturation but surprisingly exhibit a reduced EC50 for inhibiting HIV-1 integration in target cells. To better understand the reduced antiviral activity of ALLINIs during the early stage of HIV-1 replication, we investigated the competitive interplay between a potent representative ALLINI, BI/D, and LEDGF/p75 with HIV-1 integrase. While the principal binding sites of BI/D and LEDGF/p75 overlap at the integrase catalytic core domain dimer interface, we show that the inhibitor and the cellular cofactor induce markedly different multimerization patterns of full-length integrase. LEDGF/p75 stabilizes an integrase tetramer through the additional interactions with the integrase N-terminal domain, whereas BI/D induces protein-protein interactions in C-terminal segments that lead to aberrant, higher-order integrase multimerization. We demonstrate that LEDGF/p75 binds HIV-1 integrase with significantly higher affinity than BI/D and that the cellular protein is able to reverse the inhibitor induced aberrant, higher-order integrase multimerization in a dose-dependent manner in vitro. Consistent with these observations, alterations of the cellular levels of LEDGF/p75 markedly affected BI/D EC50 values during the early steps of HIV-1 replication. Furthermore, genome-wide sequencing of HIV-1 integration sites in infected cells demonstrate that LEDGF/p75-dependent integration site selection is adversely affected by BI/D treatment. Taken together, our studies elucidate structural and mechanistic details of the interplay between LEDGF/p75 and BI/D during the early stage of HIV-1 replication.