Retroviruses are a family of widespread small animal viruses about 110 nm in diameter, composed of an inner core surrounded by an outer envelope formed of a lipid bilayer of cellular origin in which are anchored viral glycoproteins. The inner core is formed by an outer shell of capsid protein molecules (CA protein) surrounding the dimeric RNA genome in close association with about 2000 molecules of nucleocapsid protein (NC protein) and molecules of reverse transcriptase (RT) and integrase (IN). Conversion of the genomic single-stranded RNA into a double-stranded proviral DNA by RT takes place in the nucleocapsid substructure and involves two DNA strand transfers to generate the long terminal repeats (LTR) required for IN-mediated integration of the proviral DNA into the cellular genome and its expression. In this review we have summarized some of the properties and functions of the nucleocapsid protein of the most intensely studied oncoretroviruses (MuLV and ASLV) and lentiviruses (HIV-1). Recent biochemical and genetic data on retroviral NC proteins have shown that this small viral protein endowed with a strong affinity for nucleic acids exhibits nucleic acid annealing and strand transfer activities and is required for the formation of infectious viral particles. These new activities of NC protein are most probably necessary at the early steps of proviral DNA synthesis. The 3-D structures of HIV-1 and MoMuLV NC proteins, deduced from NMR studies, are characterized by a central globular domain with one (MoMuLV) or two (HIV-1) zinc fingers. This should facilitate a rational approach of new anti-HIV therapies based on inhibition of NC protein functions. Due to space limitations and the very abundant literature on retroviruses, references to articles prior to the publication of the second volume of RNA Tumor Viruses in 1985 (Weiss et al., 1985) will be minimal. We also direct the reader to an excellent review which summarizes recent insights into biochemical and structural aspects of the retroviral enzymes PR, RT and IN (Katz & Skalka, 1994).