The HIV-1 nucleocapsid protein (NC) is a nucleic acid chaperone, which remodels nucleic acid structures so that the most thermodynamically stable conformations are formed. This activity is essential for virus replication and has a critical role in mediating highly specific and efficient reverse transcription. NC's function in this process depends upon three properties: (1) ability to aggregate nucleic acids; (2) moderate duplex destabilization activity; and (3) rapid on-off binding kinetics. Here, we present a detailed molecular analysis of the individual events that occur during viral DNA synthesis and show how NC's properties are important for almost every step in the pathway. Finally, we also review biological aspects of reverse transcription during infection and the interplay between NC, reverse transcriptase, and human APOBEC3G, an HIV-1 restriction factor that inhibits reverse transcription and virus replication in the absence of the HIV-1 Vif protein.