A peptide consisting of the 17 N-terminal amino acids of native bovine rhodanese in combination with the chaperone DnaJ specifically inhibits release factor- and stop codon-dependent hydrolysis of N-formylmethionine from N(formyl)-methionyl-tRNA bound with AUG to salt-washed ribosomes. Neither the peptide nor DnaJ by itself causes this inhibition. The N-terminal peptide and DnaJ both singularly and combined do not affect the peptidyltransferase reaction per se. The total amount of rhodanese synthesized in the cell-free coupled transcription-translation system is reduced by the peptide, with concomitant accumulation of full-length enzymatically inactive rhodanese polypeptides on ribosomes. In combination with DnaJ, the N-terminal polypeptide inhibits the termination and release of full-length rhodanese peptides that have accumulated on Escherichia coli ribosomes during the course of uninhibited coupled transcription-translation in the cell-free system. This inhibition appears to involve release factor 2-mediated termination at the UGA termination codon in the coding sequence for rhodanese. It is suggested that the N-terminal peptide inhibits the binding of the release factor to ribosomes. These data appear to provide the first report of differential inhibition of the termination reaction on ribosomes without inhibition of the peptidyltransferase reaction and peptide elongation.