The macrolide antibiotic erythromycin binds at the entrance of the nascent peptide exit tunnel of the large ribosomal subunit and blocks synthesis of peptides longer than between six and eight amino acids. Expression of a short open reading frame in 23 S rRNA encoding five amino acids confers resistance to erythromycin by a mechanism that depends strongly on both the sequence and the length of the peptide. In this work we have used a cell-free system for protein synthesis with components of high purity to clarify the molecular basis of the mechanism. We have found that the nascent resistance peptide interacts with erythromycin and destabilizes its interaction with 23 S rRNA. It is, however, in the termination step when the pentapeptide is removed from the peptidyl-tRNA by a class 1 release factor that erythromycin is ejected from the ribosome with high probability. Synthesis of a hexa- or heptapeptide with the same five N-terminal amino acids neither leads to ejection of erythromycin nor to drug resistance. We propose a structural model for the resistance mechanism, which is supported by docking studies. The rate constants obtained from our biochemical experiments are also used to predict the degree of erythromycin resistance conferred by varying levels of resistance peptide expression in living Escherichia coli cells subjected to varying concentrations of erythromycin. These model predictions are compared with experimental observations from growing bacterial cultures, and excellent agreement is found between theoretical prediction and experimental observation.