We imaged transcription in living cells using a locus-specific reporter system, which allowed precise, single-cell kinetic measurements of promoter binding, initiation and elongation. Photobleaching of fluorescent RNA polymerase II revealed several kinetically distinct populations of the enzyme interacting with a specific gene. Photobleaching and photoactivation of fluorescent MS2 proteins used to label nascent messenger RNAs provided sensitive elongation measurements. A mechanistic kinetic model that fits our data was validated using specific inhibitors. Polymerases elongated at 4.3 kilobases min(-1), much faster than previously documented, and entered a paused state for unexpectedly long times. Transcription onset was inefficient, with only 1% of polymerase-gene interactions leading to completion of an mRNA. Our systems approach, quantifying both polymerase and mRNA kinetics on a defined DNA template in vivo with high temporal resolution, opens new avenues for studying regulation of transcriptional processes in vivo.