Mitochondrial RNA polymerases depend on initiation factors, such as TFB2M in humans and Mtf1 in yeast Saccharomyces cerevisiae, for promoter-specific transcription. These factors drive the melting of promoter DNA, but how they support RNA priming and growth was not understood. We show that the flexible C-terminal tails of Mtf1 and TFB2M play a crucial role in RNA priming by aiding template strand alignment in the active site for high-affinity binding of the initiating nucleotides. Using single-molecule fluorescence approaches, we show that the Mtf1 C-tail promotes RNA growth during initiation by stabilizing the scrunched DNA conformation. Additionally, due to its location in the path of the nascent RNA, the C-tail of Mtf1 serves as a sensor of the RNA–DNA hybrid length. Initially, steric clashes of the Mtf1 C-tail with short RNA–DNA hybrids cause abortive synthesis but clashes with longer RNA-DNA trigger conformational changes for the timely release of the promoter DNA to commence the transition into elongation. The remarkable similarities in the functions of the C-tail and σ3.2 finger of the bacterial factor suggest mechanistic convergence of a flexible element in the transcription initiation factor that engages the DNA template for RNA priming and growth and disengages when needed to generate the elongation complex.