3'-Azido-3'-deoxythymidine-5'-phosphonate was synthesized by a five-step reaction sequence. The 5'-phosphonate was inactive against HIV-1 in MT4 cells. The absence of activity against HIV-1 was at least partially explained by demonstrating that the Km value for the 5'-deoxy-5'-methylphosphonic acid diphosphate analog with HIV-1 reverse transcriptase (RT) was 320-fold greater than the Km value for 3'-azido-3'- deoxythymidine-5'-triphosphate (AZTTP), and the kcat value for the 5'-deoxy-5'-methylphosphonic acid diphosphate analog was one-seventh the value for AZTTP. These differences in kinetic constants were due to a change in the rate-determining step from dissociation of the RT chain-terminated template-primer complex to the catalytic step. Thus, substitution of a methylene group for the 5'-oxygen atom of AZTTP resulted in an 1800-fold reduction in the rate constant for RT-catalyzed phosphodiester bond formation.