T7 RNA polymerase is a processive, DNA-dependent RNA polymerase that has a high specificity for its 17 base pair (bp) promoter. In addition to normal transcription, the enzyme can produce anomalous transcripts in the absence of a promoter. We report here the systematic characterization of the transient aspects of this promoter-independent process. Oligonucleotides that are able to form transient unimolecular loop structures closed by as little as one Watson-Crick base pair between the 3' terminal residue and an internal nucleotide proved to be viable substrates. A single nucleotide triphosphate assay system found that incorporation was encoded by the nucleotide 5' to the predicted transient base pair. When this coding nucleotide was identical to the internal nucleotide participating in the transient base pair, multiple nucleotide incorporations were observed and could only be explained by a continuous shifting and resetting of the transient base-pairing required for extension. This intermittent extension process can be quite efficient. Short DNA or RNA substrates were good substrates for the enzyme (affinities ranged from 2 to 43 microM) and were extended rapidly with apparent catalytic rates of up to 240 min(-1) being observed, only 2-fold slower than the rate of transcriptional initiation. Our data suggest a possible mechanism for this promoter-independent extension activity and may add to the understanding of viral RNA replicative strategies.