The mechanisms that control N protein dependent antitermination in phage lambda have counterparts in many eukaryotic systems, including specific regulatory interactions of the antitermination protein with the nascent RNA transcript. Here we describe the specific and nonspecific RNA binding modes of antitermination protein N. These modes differ markedly in RNA binding affinity and in structure. N protein, either free in solution or as a complex with nonspecific RNA, lacks observable secondary and tertiary structure and binds RNA sequences indiscriminately with a dissociation constant (Kd) of approximately 10(-6) M. In contrast N becomes partially folded with at least 16-18 amino acids of ordered alpha-helical structure and binds much more tightly (Kd approximately 10(-9) M) on forming a highly specific 1:1 complex with its cognate boxB RNA hairpin. These observations and others are used to help define a bipartite model of N-dependent antitermination in which these specific and nonspecific interactions control the binding of N to the nascent transcript. Finally the role of RNA looping in delivering the bound N to the transcription complex and determining the stability (and thus the terminator specificity) of the resulting antitermination interaction of N with the RNA polymerase is considered in quantitative terms.