Shortly after initiating promoter-specific transcription in vitro, mammalian RNA polymerase II becomes highly susceptible to arrest in a promoter-proximal region 9-13 base pairs downstream of the transcriptional start site (Dvir, A., Conaway, R. C., and Conaway, J. W. (1996) J. Biol. Chem. 271, 23352-23356). Arrest by polymerase in this region is suppressed by TFIIH in an ATP-dependent reaction (Dvir, A., Conaway, R. C., and Conaway, J. W. (1997) Proc. Natl. Acad. Sci. U. S. A. 94, 9006-9010). In this report, we present evidence that, in addition to TFIIH and an ATP cofactor, efficient transcription by RNA polymerase II through this promoter-proximal region requires formation of an "escape-competent" transcriptional intermediate. Formation of this intermediate requires template DNA 40-50 base pairs downstream of the transcriptional start site. This requirement for downstream DNA is transient, since template DNA downstream of +40 is dispensable for assembly of the preinitiation complex, for initiation and synthesis of the first 10-12 phosphodiester bonds of nascent transcripts and for further extension of transcripts longer than approximately 14 nucleotides. Thus, promoter escape requires that the RNA polymerase II transcription complex undergoes a critical structural transition, likely driven by interaction of one or more components of the transcriptional machinery with template DNA 40-50 base pairs downstream of the transcriptional start site.