The trigger loop (TL) forms a conserved element in the RNA polymerase active centre that functions in the elongation phase of transcription. Here, we show that the TL also functions in transcription initiation and termination. Using recombinant variants of RNA polymerase from Pyrococcus furiosus and a reconstituted transcription system, we demonstrate that the TL is essential for initial RNA synthesis until a complete DNA-RNA hybrid is formed. The archaeal TL is further important for transcription fidelity during nucleotide incorporation, but not for RNA cleavage during proofreading. A conserved glutamine residue in the TL binds the 2'-OH group of the nucleoside triphosphate (NTP) to discriminate NTPs from dNTPs. The TL also prevents aberrant transcription termination at non-terminator sites.