No biological function has been identified for tiny RNA transcripts that are abortively and repetitiously released from initiation complexes of RNA polymerase in vitro and in vivo to date. In this study, we show that abortive initiation affects termination in transcription of bacteriophage T7 gene 10. Specifically, abortive transcripts produced from promoter phi 10 exert trans-acting antitermination activity on terminator T phi both in vitro and in vivo. Following abortive initiation cycling of T7 RNA polymerase at phi 10, short G-rich and oligo(G) RNAs were produced and both specifically sequestered 5- and 6-nt C + U stretch sequences, consequently interfering with terminator hairpin formation. This antitermination activity depended on sequence-specific hybridization of abortive transcripts with the 5' but not 3' half of T phi RNA. Antitermination was abolished when T phi was mutated to lack a C + U stretch, but restored when abortive transcript sequence was additionally modified to complement the mutation in T phi, both in vitro and in vivo. Antitermination was enhanced in vivo when the abortive transcript concentration was increased via overproduction of RNA polymerase or ribonuclease deficiency. Accordingly, antitermination activity exerted on T phi by abortive transcripts should facilitate expression of T phi-downstream promoter-less genes 11 and 12 in T7 infection of Escherichia coli.