Conversion of the genomic RNA of human immunodeficiency virus (HIV) into full-length viral DNA is a complex multistep reaction catalyzed by the reverse transcriptase (RT). Numerous studies have shown that the viral nucleocapsid (NC) protein has a vital impact on various steps during reverse transcription, which is crucial for virus infection. However, the exact molecular details are poorly defined. Here, we analyzed the effect of NC on RT-catalyzed single-turnover, single-nucleotide incorporation using different nucleic acid substrates. In the presence of NC, we observed an increase in the amplitude of primer extension of up to 3-fold, whereas the transient rate of nucleotide incorporation (k pol) dropped by up to 50-fold. To unravel the underlying molecular mechanism, we carefully analyzed the effect of NC on RT - nucleic acid substrate dissociation. The studies revealed that NC considerably enhances the stability of RT - substrate complexes by reducing the observed dissociation rate constants, which more than compensates for the observed drop in kpol. In conclusion, our data strongly support the concept that NC not only indirectly assists the reverse transcription process by its nucleic acid chaperoning activity but also positively affects the RT-catalyzed nucleotide incorporation reaction by increasing polymerase processivity presumably via a physical interaction of the two viral proteins.