The human immunodeficiency virus genome is coated by the nucleocapsid protein (NC). NC is a 55 amino acid highly basic protein. It has two zinc fingers that differ by five amino acids. NC contains nucleic acid chaperone activity that aids in the formation of highly stable nucleic acid structures by destabilizing and preventing the formation of weaker structures. This activity is important for genome dimerization and maturation, tRNA:primer binding site annealing, and many steps in reverse transcription. Annealing experiments were performed with four different RNA structures and complementary DNAs. NC enhanced annealing of all structures showing that NC enhances both unwinding of nucleic acid structure and hybridization of unstructured sequences. NC mutant proteins were used in annealing assays. 1.1 NC had two copies of the first zinc finger, 2.2 NC had two copies of the second zinc finger, and 2.1 NC had both zinc fingers with their positions switched. Experiments showed that all mutants could enhance the annealing of weakly structured nucleic acids but only 1.1 NC and 2.1 NC enhanced annealing of strongly structured nucleic acids. Results suggest that finger one is important for nucleic acid unwinding while finger two plays an accessory role in annealing. The mechanism of strand exchange, another important aspect of NC chaperone activity, was also investigated. Experiments were performed using RNA:DNA hybrids with either the DNA or RNA radioactively labeled. Hybrids were incubated with different types of RNA acceptor molecules to which the DNA could transfer. The transfer of the DNA or the displacement of the original donor RNA was monitored. Experiments showed that optimal enhancement of strand exchange by NC occurred with acceptors that had more than 22 nucleotides that could anneal to the single stranded region of the DNA. Also, experiments with acceptors that had point mutations showed that the region of the acceptor that binds to the single stranded region of the DNA should be completely complementary for optimal NC stimulation. These results indicate the annealing of the acceptor and DNA outside the donor:DNA hybrid region can be an important initiation step for NC enhanced strand exchange.