An essential step in the life cycle of a retrovirus is the integration of a DNA copy of the viral genome into a host cell chromosome. We have analyzed the structure of the initial covalent product of an in vitro retroviral integration reaction and determined the structure of the ends of the unintegrated linear viral DNA molecules present in vivo in cells infected with murine leukemia virus (MLV). Our results lead to the following conclusions: (i) Circularization of viral DNA plays no role in integration. The direct precursor to the integrated MLV provirus is a linear molecule. (ii) The initial step in the integration reaction is probably a cleavage that removes the terminal 2 bases from each 3' end of the viral DNA. This cleavage depends on a virally encoded protein, IN, that has previously been shown genetically to be required for integration. (iii) The resulting viral 3' ends are joined to target DNA to form the initial recombination intermediate.