The effect of novobiocin, a coumarin class antibiotic, on rat ribosomal gene (rDNA) transcription in a fractionated extract derived from adenocarcinoma ascites cells (fraction DE-B) was studied. This drug inhibited transcription of rDNA by blocking initiation of transcription, whereas it had no effect on the elongation of the rRNA transcript. Order of addition experiments indicated that the novobiocin effect was at a step(s) in preinitiation complex formation. Preincubation of fraction DE-B with ATP before exposure to this antibiotic prevented inhibition of rDNA transcription. Since novobiocin has been shown to inhibit RNA polymerases II- and III-directed transcription of linear DNAs by interfering with a step(s) in the initiation reaction, these data suggest that initiation of transcription of all classes of RNA is inhibited by novobiocin by a mechanism independent of its effect on DNA topoisomerase II.