Transcription termination signals in bacteria occur in RNA as a strong hairpin followed by a stretch of U residues at the 3' terminus. To release the transcript, RNA polymerase (RNAP) is thought to translocate forward without RNA synthesis. Here we provide genetic and biochemical evidence supporting an alternative model in which extensive conformational changes across the enzyme lead to termination without forward translocation. In this model, flexible parts of the RNA exit channel (zipper, flap, and zinc finger) assist the initial step of hairpin folding (nucleation). The hairpin then invades the RNAP main channel, causing RNA:DNA hybrid melting, structural changes of the catalytic site, and DNA-clamp opening induced by interaction with the G(trigger)-loop. Our results envision the elongation complex as a flexible structure, not a rigid body, and establish basic principles of the termination pathway that are likely to be universal in prokaryotic and eukaryotic systems.