Unlike DNA polymerases, RNA polymerases (RNAPs) must displace the nascent product from the template and restore the DNA to duplex form after passage of the transcription complex. To accomplish this, RNAPs establish a locally denatured "bubble" that encloses a short RNA:DNA hybrid. As the polymerase advances along the template, the RNA is displaced at the trailing edge of the bubble and the two DNA strands are reannealed. Structural analyses have revealed a number of elements that are likely to be involved in this process in T7 RNAP. In this work, we used genetic and biochemical methods to explore the roles of these elements during the transition from an initiation complex to an elongation complex. The results indicate that the transition is a multistep process and reveal a critical role for the nontemplate strand of the DNA.