The selectivity of T7 RNA polymerase for its own promoters is used to direct all transcription and replication to bacteriophage T7 DNA during infection. We now find that T7 lysozyme, which is known to cut a bond in the peptidoglycan layer of the cell wall, forms a specific complex with T7 RNA polymerase and inhibits transcription. Mutations that weaken this interaction have been found in the coding sequence for T7 RNA polymerase; an affinity column containing wildtype polymerase selectively binds T7 lysozyme, but a similar column containing mutant polymerase does not. The lysozyme-polymerase interaction ensures a controlled burst of late transcription during infection, and could possibly have some direct role in replication and/or control of lysis.