We previously analyzed strand transfers catalyzed by human immunodeficiency virus, type 1 reverse transcriptase (RT) in a hairpin-containing RNA template system. In this system, RT produces a series of adjacent RNase H cuts before the hairpin base on the first, or donor template that clears a region of the donor, facilitating invasion by the second, or acceptor RNA. Here we analyze characteristics of the prominent cuts before the hairpin base and their role in strand transfers. Analysis of the template cleavage pattern during synthesis suggested that the RT performs DNA 3' end-directed primary and secondary cuts while paused at the hairpin base and that these cuts contribute to creation of the invasion site. RT catalyzed similar cleavages on a substrate representing a paused cDNA-template intermediate. DNA 3' end-directed secondary cuts, which require positioning of the polymerase active site downstream of the primer terminus, had previously not been specifically identified during synthesis. Our findings indicate that during synthesis DNA 3' end-directed primary and secondary cuts occur at pause sites. RT mutants with substitutions at the His(539) residue in the RNase H active site were defective in secondary cleavages. Analysis of the template cleavage pattern generated by the His(539) mutants during synthesis revealed inefficient cleavage at the invasion site, correlating with defects in strand transfer. Overall, results indicate RT can catalyze pause-associated DNA 3' end-directed primary and secondary cuts during synthesis and these cuts can contribute to strand transfer by creation of an invasion site.