The heterodimeric human immunodeficiency virus type 1 reverse transcriptase (HIV-1 RT) is composed of p66 and p51 subunits, p66 being the catalytic subunit. Our earlier investigation on the role of p51 in the catalytic process has shown that the p51 subunit facilitates the loading of the p66 subunit onto the template primer (TP). We had postulated that the beta7-beta8 loop of the p51 subunit may be involved in opening the polymerase cleft of p66 for DNA binding [Pandey, V. N., et al. (1996) Biochemistry 35, 2168]. We report here that deletion or alanine substitution of four residues of the beta7-beta8 loop results in severe impairment of the polymerase function of the heterodimeric enzyme. The enzyme activity was restored to the wild-type levels when the mutant p66 subunit was dimerized with the wild-type p51, suggesting that the intact beta7-beta8 loop in the p51 subunit is indispensable for the catalytic function of p66. Further, the template primer binding ability of the enzyme was significantly reduced upon deletion or alanine substitution in the beta7-beta8 loop. Interestingly, the loss of the TP binding ability of the mutant p66 was restored upon dimerization with wild-type p51. Examination of the glycerol gradient ultracentrifugation analysis revealed that while the wild-type HIV-1 RT sediments as a dimeric protein, the mutant enzymes carrying deletion or alanine substitution in both the subunits sediment predominantly as monomeric proteins, suggesting their inability to form stable dimers. In contrast, mutant p66 dimerized with wild-type p51 (p66delta/p51WT and p66Ala/p51WT) sedimented at the dimeric position. Taken together, these results clearly implicate the importance of the beta7-beta8 loop of p51 in the formation of stable functional heterodimers.