Initiation of retroviral genomic RNA dimerisation is mediated by the mutual interaction of the dimerisation initiation site (DIS) stem–loops near to the 5′ end of the RNA. This process is thought to involve formation of a transient ‘kissing’ complex over the self-complementary loop bases, which then refolds into a more stable extended interaction. We have developed a novel experimental system that allows us to clearly detect the extended duplex in vitro. Ribozyme sequences were incorporated into or adjacent to the type 1 human immunodeficiency virus DIS stem, leading to the formation of a functional ribozyme only in the extended duplex conformer. Here we show that extended duplex formation results in ribozyme cleavage, thus demonstrating the double-stranded nature of the extended complex and confirming that refolding occurs via melting of the DIS stems. Loop complementarity is essential for extended duplex formation but no sequence requirements for the loops were observed. Efficiency of extended duplex formation is dependent on the strength of the loop–loop interaction, temperature, the magnesium concentration and is strongly accelerated by the viral nucleocapsid protein NCp7. Our ribozyme-coupled approach should be applicable to the analyses of other refolding processes involving RNA loop–loop interactions.