We constructed mutants with a deletion of either half of the 18 base-pair B block palindrome in the VARNA1 gene, mutants with different intra-palindromic spacings, a complete set of mutants with single base substitutions, and mutants with double and triple base substitutions in the palindrome. The transcription efficiencies of these mutants were determined in human KB cell-free cytoplasmic S100 extracts. The relative competing strength of each mutant, as determined by a sequential competition experiment, was used to assess each mutant's ability to sequester factors into formation of a stable preinitiation complex. The ability of each mutant to assemble transcriptionally active preinitiation complexes was also determined by direct transcription of the isolated complexes. Finally, the ability of each mutant to interact with the transcription factor(s) TFIIIC and form a distinct gel-resolved complex was also determined. From the results of the above assays, we concluded that the two seemingly identical halves of the palindrome did not contribute equally to transcription, or to assembly of the functional preinitiation complex, nor to interaction with TFIIIC. The anterior half (B1) of the B block palindrome, which is proximal to the A block promoter element, played a stronger role in transcription and in assembly of the functional preinitiation complex than the posterior half (B2) of the palindrome. Consistent with this observation, the point mutations in four base-pairs, GTTC, from +60 to +63 in the anterior half of the B block palindrome, has the most severe effect on transcription. In contrast, we showed that the central sequence and the posterior half (B2) played a stronger role than the anterior half (B1) of the B block palindrome in the interaction of the promoter with TFIIIC. This was corroborated by the observation that base substitutions in the central four base-pair sequence of the palindrome, TCGA, from +62 to +65, had the most severe effect on interaction with TFIIIC, and that mutations in most of the sequences in the posterior half of the B block palindrome had more drastic effects than mutations in the anterior half of the palindrome in this interaction. Furthermore, the spacing between the two halves of the B block palindrome had a drastic effect on the overall transcription efficiency and the interaction of the promoter with TFIIIC, suggesting that the interaction between the two halves of the B block palindrome is not only essential, but also synergistic for the interaction with TFIIIC as well as the assembly of a transcriptionally active preinitiation complex and efficient transcription.