An 8-9 bp RNA-DNA hybrid in the transcription elongation complex is essential for keeping the RNA 3' terminus engaged with the active site of E. coli RNA polymerase (RNAP). Destabilization of the hybrid leads to detachment of the transcript terminus, RNAP backtracking, and shifting of the hybrid upstream. Eventually, the exposed 3' segment of RNA can be removed through transcript cleavage. At certain sites, cycles of unwinding-rewinding of the hybrid are coupled to reverse-forward sliding of the transcription elongation complex. This explains apparent discontinuous elongation, which was previously interpreted as contraction and expansion of an RNAP molecule (inch-worming). Thus, the 3'-proximal RNA-DNA hybrid plays the dual role of keeping the active site in register with the template and sensing the helix-destabilizing mismatches in RNA, launching correction through backtracking and cleavage.