We have resolved, by native gel electrophoresis, two intermediates in the transcription of a vaccinia virus early gene by the virus-encoded RNA polymerase. Polymerase holoenzyme containing the vaccinia virus early transcription factor (VETF) forms a complex of VETF bound to the promoter as the first step in a pathway leading to establishment of a committed ternary elongation complex. Formation of the VETF-DNA complex is stimulated by magnesium but is uninfluenced by nucleoside triphosphates. A stable binary complex of RNA polymerase bound to DNA is not detected. Assembly of a gel-stable polymerase-DNA complex depends on conditions permissive for RNA synthesis. Nucleotide omission experiments suggest that at least a tetrameric RNA must be made before a ternary complex is stabilized. RNA analysis indicates that complexes containing nascent transcripts 20 nucleotides long are stable and active. Ternary complex formation requires hydrolyzable ATP. This is consistent with an essential role for the ATPase activity of VETF at a step subsequent to DNA binding, as proposed by Broyles (S. S. Broyles, J. Biol. Chem. 266:15545-15548, 1991). The ternary complex, once formed, is resistant to dissociation by competitor DNA, as well as by salt, Sarkosyl, and heparin. The effects of these inhibitory agents on transcription complex formation suggest that they target different steps in the assembly pathway.