The analysis of RNA chain elongation by Saccharomyces cerevisiae RNA polymerase (Pol) III in the accompanying paper has been extended by examining the encounter of highly purified RNA polymerase with purified individual transcription factors. Arrested ternary transcription complexes were formed with purified Pol III initiating precisely at the 3' overhanging ends of linear DNA. Transcription factors were then bound to DNA and their effects on individual steps of RNA chain elongation were analyzed. The outcome of the encounter between Pol III and TFIIIC was orientation-specific. For RNA synthesis in the sense direction, with Pol III approaching the obstructing protein from the direction of normal transcription, pure TFIIIC rapidly yielded the way to the advancing polymerase: only a single step of RNA chain elongation was slightly slowed by pure TFIIIC occupying its boxB binding site in the SUP4 tRNA(Tyr) gene. In a complete cell-free fraction, protein binding to this tRNA gene likewise generated a delay of only approximately 0.15 to 0.2 second in executing the same step. Transcription by pure Pol III in the sense direction also dissociated the TFIIIC-SUP4 gene complex. The encounter of Pol III elongating RNA chains in the anti-sense direction with the backside of TFIIIC yielded a different outcome. RNA chain elongation paused extensively six to nine base-pairs beyond the downstream edge of the DNA-binding site of TFIIIC, with a median delay of nine seconds, approximately 50 times longer than in the sense direction. At the height of its effect on RNA chain elongation, the TFIIIC-imposed barrier entrapped the great majority of RNA chains, but their elongation was eventually allowed to continue. In contrast, DNA-bound TFIIIB completely blocked RNA chain elongation in the anti-sense direction. The role of the internal promoter element in transcription by Pol III is discussed in the light of this analysis. The large bulk of TFIIIC, which binds with high affinity to boxB, and also to boxA, is particularly suited to occluding its transcription unit to other proteins. At the same time, TFIIIC makes way for transcription so rapidly that it places no limit on the level of gene activity.