RNA polymerase is a target for numerous regulatory events in all living cells. Recent studies identified a few "hot spots" on the surface of bacterial RNA polymerase that mediate its interactions with diverse accessory proteins. Prominent among these hot spots, the beta' subunit clamp helices serve as a major binding site for the initiation factor sigma and for the elongation factor RfaH. Furthermore, the two proteins interact with the nontemplate DNA strand in transcription complexes and thus may interfere with each other's activity. We show that RfaH does not inhibit transcription initiation but, once recruited to RNA polymerase, abolishes sigma-dependent pausing. We argue that this apparent competition is due to a steric exclusion of sigma by RfaH that is stably bound to the nontemplate DNA and clamp helices, both of which are necessary for the sigma recruitment to the transcription complex. Our findings highlight the key regulatory role played by the clamp helices during both initiation and elongation stages of transcription.