Reverse transcription of HIV-1 genome involves multiple nucleic acids structural rearrangements chaperoned by nucleocapsid protein (NC). One such critical step is that the DNA transactivation response element (TAR) anneals to it complementary RNA region on the genome. It has been challenging to investigate mechanistic details on the annealing process because of the involvement of heterogeneous sets of protein/nucleic acid complexes. Here, we use single-molecule spectroscopy to study the NC induced melting of nucleic acid structure and the annealing activity of different regions along TAR structure. We find that NC induced secondary fluctuations are limited to the terminal stems, and the mechanism for the fluctuations is complex. By employing complementary targeted oligomers, we kinetically trap and investigate stable states of the putative nucleation complexes for the annealing process. This single molecule spectroscopy method directly probes kinetic reversibility and the chaperone role of NC at various stages along the reaction sequence. The new results lead to detailed understanding of NC chaperoned reverse-annealing and the partially annealed conformational sub-states. Argininamide, because of its specific binding to the loop regions of TAR, was studied on its specific inhibition to strand transfer. The loop-mediated annealing is found to be more potentially inhibited than stem-mediated one.