De novo RNA synthesis by hepatitis C virus (HCV) nonstructural protein 5B (NS5B) RNA-dependent RNA polymerase has been investigated using short RNA templates. Various templates including those derived from the HCV genome were evaluated by examining the early steps of de novo RNA synthesis. NS5B was shown to be able to produce an initiation dinucleotide product from templates as short as 4-mer and from the 3'-terminal sequences of both plus and minus strands of the HCV RNA genome. GMP, GDP, and guanosine were able to act as an initiating nucleotide in de novo RNA synthesis, indicating that the triphosphate moiety is not absolutely required by an initiating nucleotide. Significant amounts of the initiation product accumulated in de novo synthesis, and elongation from the dinucleotide was observed when large amounts of dinucleotide were available. This result suggests that NS5B, a template, and incoming nucleotides are able to form an initiation complex that aborts frequently by releasing the dinucleotide product before transition to an elongation complex. The transition is rate limiting. Furthermore, we discovered that the secondary structure of a template was not essential for de novo initiation and that 3'-terminal bases of a template conferred specificity in selection of an initiation site. Initiation can occur at the +1, +2, or +3 position numbered from the 3' end of a template depending on base composition. Pyrimidine bases at any of the three positions are able to serve as an initiation site, while purine bases at the +2 and +3 positions do not support initiation. This result implies that HCV possesses an intrinsic ability to ensure that de novo synthesis is initiated from the +1 position and to maintain the integrity of the 3' end of its genome. This assay system should be an important tool for investigating the detailed mechanism of de novo initiation by HCV NS5B as well as other viral RNA polymerases.