Phages lambda and HK022 express proteins N and Nun, respectively, each of which acts with a number of Escherichia coli host Nus factors at lambda NUT RNA sites, to influence transcription elongation. The lambda nut sites, nearly identical sequences located downstream of the early promoters, pL and pR, were first identified as cis-acting signals required for the action of N in forming termination-resistant transcription complexes. Surprisingly, the Nun protein, resembling N and expressed by another lambdoid phage, HK022, also acts with Nus proteins to terminate specifically transcription initiating at pL and pR near the lambda nut sites. Based on structural considerations of the amino acid sequences, we have constructed nine hybrid N-nun genes and used these hybrids to identify functional regions of the N and Nun proteins. Three classes of hybrid gene products were identified: (1) those that, like N, support antitermination, (2) those that, like Nun, terminate transcription, and (3) those that block N action but do not terminate transcription. We find that, similar to N, the amino-terminal portion of Nun is involved in RNA recognition. The more carboxy portions influence transcription elongation, antitermination (N) and termination (Nun). Depending on the derivations of the more carboxy regions, hybrids with either the N or Nun amino portions support either termination or antitermination. The activity of a hybrid protein may be influenced by the host strain depending on the nature of the rpoC locus, a locus encoding the beta' subunit of RNA polymerase. One of the hybrid proteins blocks antitermination when the rpoC locus is wild-type. The same hybrid in the presence of the rpoC100 mutation, which alters the beta' subunit, has antitermination activity. This result supports the argument that the beta' subunit plays an essential role in determining the progress of transcription elongation.