Certain Escherichia coli rho mutations, exemplified by rho026, block the growth of phage lambda by interfering with phage gene expression. The phage gene N, whose product suppresses transcription termination, appears to be expressed normally in the mutants, and the functional stability of the N protein is not affected. Our data suggest that these rho mutations allow transcription to terminate despite the presence of N. Other E. coli mutants displaying a similar phenotype (Nus(-)) fail to propagate wild-type lambda but permit the growth of the lambda variant lambdanin5, which has undergone a deletion of the lambda terminator t(R2). The phenotype of the rho026 mutant differs: the growth of lambda is only marginally improved by the nin5 deletion. Interestingly, N activity at rho-independent terminators is not inhibited by the mutations, whereas its ability to suppress rho-dependent terminators is markedly reduced. The relevance of this specificity in terms of models of N action is discussed.