We have prepared a MAb, 7C4, which inhibits the RNA-dependent DNA polymerase activity of human immunodeficiency virus type 1 (HIV- 1) reverse transcriptase (RT); this MAb has allowed identification of a previously unknown neutralizing epitope of RT. Analysis of the epitope and of the mechanism of polymerase inhibition revealed that 7C4 acts by interfering with the interaction between RT and the template-primer. 7C4 recognizes a discontinuous epitope on the two alpha-helices, alphaH and alpha(I), that make up the 'thumb' subdomain of RT. The existing crystallographic model of HIV-1 RT suggests that the 'thumb' subdomain, together with the 'fingers' and 'palm', form a nucleic-acid-binding cleft in the 66 kDa subunit of RT and that alphaH is in contact with the primer strand of the template-primer. The extent of inhibition of enzyme activity produced by 7C4 correlates with the reported primer-length-dependency of template-primer binding to RT. Inhibition by 7C4 was competitive with respect to the template-primer and mixed with respect to the substrate. Binding of 7C4 to RT was prevented by preincubation of the enzyme with high concentrations of template-primer but not with substrate. Thus, the 7C4 epitope apparently exists on part of the template-primer binding site of the alphaH and alpha(I) regions of the 'thumb' subdomain. This neutralization epitope is a logical target for the development of new types of HIV-1 RT inhibitors.