Retroviral integration is central to viral persistence and pathogenesis, cancer as well as host genome evolution. However, it is unclear why integration appears essential for retrovirus production, especially given the abundance and transcriptional potential of non-integrated viral genomes. The involvement of retroviral endonuclease, also called integrase (IN), in replication steps apart from integration has been proposed, but is usually considered to be accessory. We observe here that integration of a retrovirus from the spumavirus family depends mainly on the quantity of viral DNA produced. Moreover, we found that IN directly participates to linear DNA production from 2-LTR circles by specifically cleaving the conserved palindromic sequence found at LTR-LTR junctions. These results challenge the prevailing view that integrase essential function is to catalyze retroviral DNA integration. Integrase activity upstream of this step, by controlling linear DNA production, is sufficient to explain the absolute requirement for this enzyme. The novel role of IN over 2-LTR circle junctions accounts for the pleiotropic effects observed in cells infected with IN mutants. It may explain why 1) 2-LTR circles accumulate in vivo in mutants carrying a defective IN while their linear and integrated DNA pools decrease; 2) why both LTRs are processed in a concerted manner. It also resolves the original puzzle concerning the integration of spumaretroviruses. More generally, it suggests to reassess 2-LTR circles as functional intermediates in the retrovirus cycle and to reconsider the idea that formation of the integrated provirus is an essential step of retrovirus production.