The startling increase in the occurrence of rifampicin (Rif) resistance in the clinical isolates of Mycobacterium tuberculosis worldwide is posing a serious concern to tuberculosis management. The majority of Rif resistance in bacteria arises from mutations in the RpoB subunit of the RNA polymerase. We isolated M. smegmatis strains harbouring either an insertion (6 aa) or a deletion (10 aa) in their RpoB proteins. Although these strains showed a compromised fitness for growth in 7H9 Middlebrook medium, their resistance to Rif was remarkably high. The attenuated growth of the strains correlated with decreased specific activities of the RNA polymerases from the mutants. While the RNA polymerases from the parent or a mutant strain (harbouring a frequently occurring mutation, H442Y, in RpoB) were susceptible to Rif-mediated inhibition of transcription from calf thymus DNA, those from the insertion and deletion mutants were essentially refractory to such inhibition. Three-dimensional structure modelling revealed that the RpoB amino acids that interact with Rif are either deleted or unable to interact with Rif due to their unsuitable spatial positioning in these mutants. We discuss possible uses of the RpoB mutants in studying transcriptional regulation in mycobacteria and as potential targets for drug design.