Retroviral RNA encapsidation depends on the specific binding of Gag proteins to packaging (psi) signals in genomic RNA. We investigated whether an in vitro-selected, high-affinity RNA ligand for the nucleocapsid (NC) portion of the Gag protein from human immunodeficiency virus type 1 (HIV-1) could mediate packaging into HIV-1 virions. We find that this ligand can functionally substitute for one of the Gag-binding elements (termed SL3) in the HIV-1 psi locus to support packaging and viral infectivity in cis. By contrast, this ligand, which fails to dimerize spontaneously in vitro, is unable to replace a different psi element (termed SL1) which is required for both Gag binding and dimerization of the HIV-1 genome. A single point mutation within the ligand that eliminates high-affinity in vitro Gag binding also abolishes its packaging activity at the SL3 position. These results demonstrate that specific binding of Gag or NC protein is a critical determinant of genomic RNA packaging.