The possible transcription of the 5'-terminal cap nucleotide of mRNA by RNA-dependent DNA polymerase was examined by a single-step assay, based on the generation of a hairpin structure during reverse transcription of globin mRNA. Using this approach, we demonstrated that the 5'-terminal cap nucleotide of mRNA is indeed transcribed by RNA-dependent DNA polymerase into a 3'-terminal residue of cDNA and were able to measure the extent of such transcription. The observed transcription of the cap nucleotide raises a number of questions that may be addressed using the relatively simple single-step assay employed in the present study. Cap nucleotide transcription by RNA-dependent DNA polymerase may have important implications for our understanding of the mechanism of action of reverse transcriptases. It may represent a selection mechanism for only partial transcription of the 5' repeat element of viral RNA genome, thus generating a RNA fragment that may play a role in priming of second (plus) DNA strand during retroviral reverse transcription. Moreover, the demonstrated ability of complementary nucleotides to form hydrogen bonds, even when in a parallel orientation, may have interesting and important consequences.