The HIV p17 or matrix (MA) protein has long been implicated in the process of nuclear import of the HIV genome and thus the ability of the virus to infect nondividing cells such as macrophages. While it has been demonstrated that MA is not absolutely required for this process, debate continues to surround the subcellular targeting properties of MA and its potential contribution to nuclear import of the HIV cDNA. Through the use of in vitro techniques we have determined that, despite the ability of MA to interact with importins, the full-length protein fails to enter the nucleus of cells. While MA does contain a region of basic amino acids within its N-terminus which can confer nuclear accumulation of a fusion protein, we show that this is due to nuclear retention mediated by DNA binding and does not represent facilitated import. Importantly, we show that the 26KK residues of MA, previously thought to be part of a nuclear localization sequence, are absolutely required for a number of MA's functions including its ability to bind DNA and RNA and its propensity to form high-order multimers/protein aggregates. The results presented here indicate that the N-terminal basic domain of MA does not appear likely to play a role in HIV cDNA nuclear import; rather this region appears to be a crucial structural and functional motif whose integrity is required for a number of other roles performed by MA during viral infection.