Reverse transcriptases (RTs) are found in a wide variety of mobile genetic elements including viruses, retrotransposons, and infectious organellar introns. An invariant triad of aspartates is thought to be required for the catalytic function of RTs. We generated RT mutants in the yeast retrotransposon Ty1, changing each of these active-site aspartates to asparagine or glutamate. All but one of the mutants lacked detectable polymerase activity. The novel exception, D(211)N, retained near wild-type in vitro polymerase activity within virus-like particles but failed to carry out in vivo transposition. For this mutant, minus-strand synthesis is impaired and formation of the plus-strand strong-stop intermediate is eliminated. Intragenic second-site suppressor mutations of the transposition defect map to the RNase H domain of the enzyme. Our results demonstrate that one of the three active-site aspartates in a retrotransposon RT is not catalytically critical. This implies a basic difference in the polymerase active-site geometry of Ty1 and human immunodeficiency virus RT and shows that subtle mutations in one domain can cause dramatic functional effects on a distant domain of the same enzyme.