We recently reported that viral
DNA
could be the primary target of raltegravir (
RAL
), an efficient anti‐
HIV
‐1 drug, which acts by inhibiting integrase. To elucidate this mechanism, we conducted a comparative analysis of
RAL
and
TB
11, a diketoacid abandoned as an anti‐
HIV
‐1 drug for its weak efficiency and marked toxicity, and tested the effects of the catalytic cofactor Mg
2+
(5 m
m
) on drug‐binding properties. We used circular dichroism and fluorescence to determine drug affinities for viral
DNA
long terminal repeats (
LTR
s) and peptides derived from the integrase active site and
DNA
retardation assays to assess drug intercalation into
DNA
base pairs. We found that
RAL
bound more tightly to
LTR
ends than did
TB
11 (a diketo acid bearing an azido group) and that Mg
2+
significantly increased the affinity of both
RAL
and
TB
11. We also observed a good relationship between drug binding with processed
LTR
and strand transfer inhibition. This unusual type of inhibition was caused by Mg
2+
‐assisted binding of drugs to
DNA
substrate, rather than to enzyme. Notably, while
RAL
bound exclusively to the cleavable/cleaved site,
TB
11 further intercalated into
DNA
base pairs and interacted with the integrase‐derived peptides. These unwanted binding sites explain the weaker bioavailability and higher toxicity of
TB
11 compared with the more effective
RAL
.