The isolated ribonuclease (RNase) H domain of human immunodeficiency virus type 1 (HIV-1) is enzymatically inactive. The incorporation of the putative substrate binding site of Escherichia coli RNase HI (amino acid residues 76-102, the alpha c-helix and adjacent loop region) into the equivalent position of the RNase H domain of HIV-1 resulted in a highly active hybrid protein dependent on Mn2+. Similar restoration of RNase H activity has been observed when histidine residues are added to either the N- or C-terminus of the HIV-1 RNase H domain. The hybrid HIV-1/E. coli RNase H protein is approximately 10-fold more active than HIV-1 reverse transcriptase and 30-fold more active than the histidine-tagged proteins, indicating that the alpha c-helix and adjacent loop region of E. coli RNase HI is an excellent substrate binding region because of its sequence and/or location. The RNase H hybrid produced the same specific cleavage in the model tRNA(Lys3) primer removal assay as HIV-1 reverse transcriptase, showing that substrate binding and specificity are separable and that the specificity determinants are at least partially, if not totally, contained in the amino acid sequence of the hybrid protein derived from HIV-1 reverse transcriptase.