In bacteriophage lambda, formation of a transcriptional anti-termination complex involving the elongating RNA polymerase is mediated by the interaction of boxB RNA with the RNA-binding domain of the N protein (N peptide). In an attempt to understand the spatial requirements for boxB/N peptide interaction within the anti-termination complex, the effects of changes in the distance between boxA and boxB RNA, the length of the boxB stem, and the distance between the N peptide and remainder of the N protein were examined using a bacterial reporter system. It was found that the requirements for boxB stem length and the distance between N peptide and the remainder of N were optimized and strict. In contrast, replacement of the boxB/N interaction by heterologous RNA-peptide interactions appeared to relax the strict requirement for RNA stem length and the orientation of the RNA-binding peptide, presumably due to the absence of the cooperative interaction between boxB/N and the host factor NusA. In addition, the decrease in activity upon stem lengthening could be partially suppressed by simultaneous lengthening of the RNA spacer. A further understanding of the structural organization of the anti-termination complex may provide insights into how functional ribonucleoprotein complexes may be engineered.