It has been shown that L-731988, a potent integrase inhibitor, targets a conformation of the integrase enzyme formed when complexed to viral DNA, with the 3'-end dinucleotide already cleaved. It has also been shown that diketo acid inhibitors bind to the strand transfer complex of integrase and are competitive with the host target DNA. However, published X-ray structures of HIV integrase do not include the DNA; thus, there is a need to develop a model representing the strand transfer complex. In this study, we have constructed an active-site model of the HIV-1 integrase complexed with viral DNA using the crystal structure of DNA-bound transposase and have identified a binding mode for inhibitors. This proposed binding mechanism for integrase inhibitors involves interaction with a specific Mg(2+) in the active site, accentuated by a hydrophobic interaction in a cavity formed by a flexible loop upon DNA binding. We further validated the integrase active-site model by selectively mutating key residues predicted to play an important role in the binding of inhibitors. Thus, we have a binding model that is applicable to a wide range of potent integrase inhibitors and is consistent with the available resistant mutation data.