The RNA-dependent RNA polymerase NS5B is a key enzyme of the replication of hepatitis C virus (HCV) and a major therapeutic target. Applying a novel continuous assay with highly purified protein and a fluorescent RNA-template we provide for the first time a comprehensive mechanistic description of the enzymatic reaction. Using fluorescence spectroscopy, the kinetics of NS5B was confirmed to consist of two half-reactions, namely substrate binding and turnover. Determining the binding constants of the substrates and the rate constants of individual reaction steps, NS5B was shown to bind the template single-stranded RNA with high affinity (nanomolar range) and in a stepwise process that reflects the substrate positioning. As demonstrated by CD, NTP(s) binding caused a tertiary structural change of the enzyme into an active conformation. The second half-reaction was dissected into a sequential polymerization and a subsequent, rate-limiting product release reaction. Taking advantage of these tools, we analyzed the mechanism of action of the NS5B inhibitor HCV-796, which was shown to interfere with the formation of double-stranded RNA by blocking the second half-reaction.