During HIV-1 reverse transcription, the plus-strand of viral DNA is synthesized as two discrete segments. We show here that synthesis of the upstream segment terminates at the center of the genome after an 88 or 98 nucleotide strand displacement of the downstream segment, initiated at the central polypurine tract. Thus, the final structure of unintegrated linear HIV-1 DNA includes a central plus-strand overlap. In vitro reconstitution using only purified reverse transcriptase with appropriate DNA hybrids gave rise to efficient and accurate termination, which was dramatically amplified in the context of strand displacement. Mutation of the sequence immediately upstream of the termination sites almost completely abolished termination both in infected cells and in vitro. This mutation profoundly impaired replication of HIV-1. We conclude that proper central plus-strand termination, mediated by a novel cis-active termination sequence, is a key step in HIV-1 replication.