Selective packaging of HIV-1 genomic RNA (gRNA) requires the presence of a cis-acting RNA element called the 'packaging signal' (Ψ). However, the mechanism by which Ψ promotes selective packaging of the gRNA is not well understood. We used fluorescence correlation spectroscopy and quenching data to monitor the binding of recombinant HIV-1 Gag protein to Cy5-tagged 190-base RNAs. At physiological ionic strength, Gag binds with very similar, nanomolar affinities to both Ψ-containing and control RNAs. We challenged these interactions by adding excess competing tRNA; introducing mutations in Gag; or raising the ionic strength. These modifications all revealed high specificity for Ψ. This specificity is evidently obscured in physiological salt by non-specific, predominantly electrostatic interactions. This nonspecific activity was attenuated by mutations in the MA, CA, and NC domains, including CA mutations disrupting Gag-Gag interaction. We propose that gRNA is selectively packaged because binding to Ψ nucleates virion assembly with particular efficiency.