The alc gene product (gpalc) of bacteriophage T4 inhibits the transcription of cytosine-containing DNA in vivo. We examined its effect on transcription in vitro by comparing RNA polymerase isolated from Escherichia coli infected with either wild-type T4D+ or alc mutants. A 50 to 60% decline in RNA polymerase activity, measured on phage T7 DNA, was observed by 1 min after infection with either T4D+ or alc mutants; this did not occur when the infecting phage lacked gpalt. In the case of the T4D+ strain but not alc mutants, this was followed by a further decrease. By 5 min after infection the activity of alc mutants was 1.5 to 2.5 times greater than that of the wild type on various cytosine-containing DNA templates, whereas there was little or no difference in activity on T4 HMdC-DNA, in agreement with the in vivo specificity. Effects on transcript initiation and elongation were distinguished by using a T7 phage DNA template. Rifampin challenge, end-labeling with [gamma-32P]ATP, and selective initiation with a dinucleotide all indicate that the decreased in vitro activity of the wild-type polymerase relative to that of the alc mutants was due to inhibition of elongation, not to any difference in initiation rates. Wild-type (but not mutated) gpalc copurified with RNA polymerase on heparin agarose but not in subsequent steps. Immunoprecipitation of modified RNA polymerase also indicated that gpalc was not tightly bound to RNA polymerase intracellularly. It thus appears likely that gpalc inhibits transcript elongation on cytosine-containing DNA by interacting with actively transcribing core polymerase as a complex with the enzyme and cytosine-rich stretches of the template.