The HIV-1 nucleocapsid 7 (NCp7) plays crucial roles in multiple stages of HIV-1 life cycle, and its biological functions rely on the binding of zinc ions. Understanding the molecular mechanism of how the zinc ions modulate the conformational dynamics and functions of the NCp7 is essential for the drug development and HIV-1 treatment. In this work, using a structure-based coarse-grained model, we studied the effects of zinc cofactors on the folding and target RNA(SL3) recognition of the NCp7 by molecular dynamics simulations. After reproducing some key properties of the zinc binding and folding of the NCp7 observed in previous experiments, our simulations revealed several interesting features in the metal ion modulated folding and target recognition. Firstly, we showed that the zinc binding makes the folding transition states of the two zinc fingers less structured, which is in line with the Hammond effect observed typically in mutation, temperature or denaturant induced perturbations to protein structure and stability. Secondly, We showed that there exists mutual interplay between the zinc ion binding and NCp7-target recognition. Binding of zinc ions enhances the affinity between the NCp7 and the target RNA, whereas the formation of the NCp7-RNA complex reshapes the intrinsic energy landscape of the NCp7 and increases the stability and zinc affinity of the two zinc fingers. Thirdly, by characterizing the effects of salt concentrations on the target RNA recognition, we showed that the NCp7 achieves optimal balance between the affinity and binding kinetics near the physiologically relevant salt concentrations. In addition, the effects of zinc binding on the inter-domain conformational flexibility and folding cooperativity of the NCp7 were also discussed.