Formation of the RNA primer for CoIE1 DNA replication is inhibited by random substitution of less than one tenth of G residues by I residues during in vitro transcription. Substitution in any one of several regions of the transcript is inhibitory, even in the region more than 400 nucleotides upstream of the origin of DNA replication. The inhibition results from interference with hybrid formation between nascent RNA II (primer transcript) and the template DNA near the replication origin. Association of RNA I with RNA II, which has been known to inhibit primer formation, enhances pausing of transcription of RNA II at a site far downstream of the region where RNA I hybridizes to the transcript. A large deletion in the region which specifies both RNA I and RNA II suppresses primer formation and also enhances pausing of transcription at the same site. These results show that the secondary structure of RNA II during transcription is important for primer formation and that alteration in the structure of the nascent transcript can change transcriptional events far downstream.