Reverse transcriptase (RT)-associated ribonuclease H (RNase H) can cleave both the RNA template of DNA/RNA hybrids as well as double-stranded (ds) RNA. This report shows that human immunodeficiency virus (HIV)-RT can also cleave the template strand of dsDNA when Mg2+ is replaced by Fe2+ in the RNase H active site of HIV-RT. The cleavage mechanisms as well as the positions of the cut vary depending on whether RNA or DNA is used. While DNA is cleaved 17 base positions upstream of the primer 3'-end, RNA is cleaved 18 base positions upstream. Competition experiments show that Fe2+ replaces the catalytically active Mg2+ of RT-associated RNase H. The bound Fe2+ is the source of locally generated OH-radicals that cleave the most proximate base in the DNA. Electrophoretic mobility studies of the cleaved fragments suggest that DNA is cleaved by an oxidative mechanism, while RNA is cleaved by an enzymatic mechanism which is indistinguishable from the Mg2+-dependent cleavage. The Fe2+-dependent cuts can be used to trace the active site of RT-associated RNase H on dsDNA as well as on dsRNA and DNA/RNA hybrids. The observed 1 base difference in the cleavage positions on DNA and RNA templates can be attributed to conformational differences of the bound nucleic acids. We suggest that the lower pitch of dsRNA and DNA/RNA hybrids compared with dsDNA permits accommodation of an additional base pair in the region between the primer 3'-end and the Fe2+-dependent cleavage position at the RNase H active site.