During reverse transcription, the RNase H activity of reverse transcriptase specifically cleaves the viral genome within the polypurine tract (PPT) to create the primer used for the initiation of plus-strand DNA synthesis and nonspecifically cleaves the viral genome to facilitate synthesis of plus-strand DNA. To understand how primer length and sequence affect generation and utilization of the PPT, we employed short hybrid substrates containing or lacking the PPT to evaluate cleavage, extension, and binding by reverse transcriptase. Substrates containing RNAs with the correct 3' end for initiation of plus-strand synthesis were extended equally well by reverse transcriptase, but primer length affected susceptibility to RNase H cleavage. RNA substrates with 3' ends extending beyond the plus strand initiation site were extended poorly but were specifically cleaved to generate the correct 3' end for initiation of plus-strand synthesis, Substrates containing RNAs lacking the PPT were cleaved nonspecifically and extended inefficiently. Specific cleavages to generate the plus-strand primer and 5'-end-directed cleavages were kinetically favored over cleavages that destroyed the PPT primer or degraded other short RNA fragments. The PPT was not intrinsically resistant to cleavage by the isolated RNase H domain, and the isolated polymerase domain extended RNA primers containing the PPT sequence irrespective of the primer 3' end. These results provide insights into how reverse transcriptase generates and selectively utilizes the PPT primer for initiation of plus strand DNA synthesis.