Nucleic acid complexes with ethidium intercalated into different sites in a segment of HIV-1 TAR RNA with an unpaired A base, along with corresponding complexes with a normal RNA sequence without an unpaired base were studied by molecular mechanics energy minimization methods. Different intercalation geometries as well as different orientations of the ethidium molecule in the intercalation sites were tested. A general binding affinity enhancement for the ethidium binding to the bulge sequence compared with the normal RNA segment was obtained. With the unpaired adenosine base stacked in the duplex, the binding site adjacent to the 3' side of the bulge was found to be the most energetically favorable binding site, and the intercalation site 5' to the bulge in the same sequence is much less favorable. Unique correlated backbone conformational changes on binding of ethidium to the intercalation site 3' to the bulge were found to relieve backbone strains caused by the stacking of the unpaired base into the helix. These backbone conformational changes present a plausible molecular basis for the experimentally observed ethidium binding preference in this bulge RNA segment (L.S. Ratmeyer, R. Vinayak, G. Zon and W.D. Wilson, J. Med. Chem. 35, 966, 1992).