The effects of dinucleoside monophosphates on the transcription of phage T4 DNA by E. coli RNA polymerase have been examined at various concentrations of the sigma subunit and extremely low concentration of ribonucleoside triphosphate. The following conclusions were reached: (i) Labeled specific dinucleoside monophosphates are incorporated as chain initiators. (ii) When the ratio of sigma factor to core enzyme is small, there is a general stimulation by most 5'-guanosyl dinucleoside monophosphates. (iii) When the ratio is increased or holoenzyme is present, ApU, CpA, UpA, and GpU are the most effective stimulators. (iv) At high concentrations of sigma factor, only certain adenosine-containing dinucleoside monophosphates (ApU, CpA, UpA, and ApA) stimulate the reaction. (v) Competition hybridization studies indicate that the RNAs stimulated by dinucleoside monophosphates (ApU, CpA, UpA, and GpU) are of the T4 "early" type. (vi) Studies involving both combinations of stimulatory dinucleoside monophosphates and competitive effects of these compounds on chain initiation by ATP and GTP suggest that the stimulatory dinucleoside monophosphates act as chain initiators and may recognize part of a continuous sequence in a promoter region. Studies based on the incorporation of 3H-labeled stimulatory dinucleoside monophosphates support the above conclusions.The discovery of the sigma (a) subunit of bacterial RNA polymerase added strength to the concept of positive control of transcription in vitro (1-3). a-Factor is a necessary requirement for accurate initiation of RNA synthesis by core RNA polymerase in vitro on certain phage DNA templates (4-7). Our studies with well-defined templates have shown that the stimulatory effect of o-factor depends on both the base composition and secondary structure of the template, as well as the concentration of ribonucleoside triphosphate, and that the same type of stimulatory effect is obtained with oligoribonucleotides complementary to the templates (8). Earlier studies by Niyogi and Stevens (9) with holo RNA polymerase and synthetic polyribonucleotide templates indicated that only complementary oligoribonucleotides with a free 3'-hydroxyl group are stimulatory and preferentially incorporated into the 5'phosphomonoester chain end of the product, hence acting as chain initiators. Gros et al. (10)