Specific interactions between retroviral integrase (IN) and long terminal repeats are required for insertion of viral DNA into the host genome. To characterize quantitatively the determinants of substrate specificity, we used a method based on a stepwise increase in ligand complexity. This allowed an estimation of the relative contributions of each nucleotide from oligonucleotides to the total affinity for IN. The interaction of HIV-1 integrase with specific (containing sequences from the LTR) or nonspecific oligonucleotides was analyzed using a thermodynamic model. Integrase interacted with oligonucleotides through a superposition of weak contacts with their bases, and more importantly, with the internucleotide phosphate groups. All these structural components contributed in a combined way to the free energy of binding with the major contribution made by the conserved 3'-terminal GT, and after its removal, by the CA dinucleotide. In contrast to nonspecific oligonucleotides that inhibited the reaction catalyzed by IN, specific oligonucleotides enhanced the activity, probably owing to the effect of sequence-specific ligands on the dynamic equilibrium between the oligomeric forms of IN. However, after preactivation of IN by incubation with Mn(2+), the specific oligonucleotides were also able to inhibit the processing reaction. We found that nonspecific interactions of IN with DNA provide approximately 8 orders of magnitude in the affinity (Delta G degrees approximately equal to -10.3 kcal/mol), while the relative contribution of specific nucleotides of the substrate corresponds to approximately 1.5 orders of magnitude (Delta G degrees approximately equal to - 2.0 kcal/mol). Formation of the Michaelis complex between IN and specific DNA cannot by itself account for the major contribution of enzyme specificity, which lies in the k(cat) term; the rate is increased by more than 5 orders of magnitude upon transition from nonspecific to specific oligonucleotides.