Addition of 10 to 100 oligodeoxycytidylate residues to the 3'-OH termini of T7 bacteriophage DNA produces a highly efficient template for transcription in vitro with purified calf thymus RNA polymerase II. Transcription initiates rapidly and selectively at the oligo (dC) ends of such a template and essentially all of the active RNA polymerase II molecules are then committed to a long period of RNA chain elongation. This allows the direct study of the RNA chain elongation and termination reactions and also permits determination of the concentration of active RNA polymerase II that is present. From 15 to 25% of the RNA polymerase molecules in our current preparations are active in these reactions. RNA chain elongation by calf thymus RNA polymerase II is relatively slow (7 nucleotides/s) even at saturating substrate concentrations. The in vitro elongation process appears to be discontinuous, with elongating polymerase molecules pausing for significant periods at certain sequences along the DNA. There is a low, but measurable frequency of RNA chain termination at some sites; however, the majority of elongating transcripts can grow to large sizes (over 6000 nucleotides). Surprisingly, over 60% of the active calf thymus RNA polymerase II molecules form a long DNA-RNA hybrid during in vitro transcription and displace the nontranscribed DNA from the template to produce a characteristic split end structure. DNA-RNA hybrids are also formed during transcription by RNA polymerase II from duplex DNA templates lacking 3' oligo(dC) tails, which takes place predominantly at single strand breaks or ends. Thus the transcriptional elongation reaction carried out by calf thymus RNA polymerase II in vitro differs in several respects from that which must take place in vivo.