The genetic information of retroviruses is retained within a dimeric RNA genome held together by intermolecular RNA-RNA interactions near the 5' ends. Coencapsidation of retrovirus-derived RNA molecules allows frequent template switching of the virus-encoded reverse transcriptase during DNA synthesis in newly infected cells. We have previously shown that template shifts within the 5' leader of murine leukemia viruses occur preferentially within the kissing stem-loop motif, a cis element crucial for in vitro RNA dimer formation. By use of a forced recombination approach based on single-cycle transfer of Akv murine leukemia virus-based vectors harboring defective primer binding site sequences, we now report that modifications of the kissing-loop structure, ranging from a deletion of the entire sequence to introduction of a single point mutation in the loop motif, significantly disturb site specificity of recombination within the highly structured 5' leader region. In addition, we find that an intact kissing-loop sequence favors optimal RNA encapsidation and vector transduction. Our data are consistent with the kissing-loop dimerization model and suggest that a direct intermolecular RNA-RNA interaction, here mediated by palindromic loop sequences within the mature genomic RNA dimer, facilitates hotspot template switching during retroviral cDNA synthesis in vivo.