The phage HK022 Nun protein excludes phage lambda by binding nascent lambda pL and pR transcripts at nutL and nutR, respectively, and inducing transcription termination just downstream of these sites. Termination is more efficient at nutL than at nutR. One difference between nutL and nutR is the presence of RNase III processing sites (rIII) located immediately promoter distal to lambda nutL. We found that deletion of rIII dramatically reduced Nun transcription arrest in vitro but had little effect on termination in vivo. However, consistent with the in vitro results, overexpression of a transcript carrying nutL and rIII efficiently titrated Nun, allowing lambda to grow on a strain that expressed Nun, whereas a transcript carrying only nutL or nutL-rIII with nucleotides 97 to 141 deleted was ineffective. Rnc70, an RNase III mutant that binds but does not cleave rIII, also prevented Nun-mediated lambda exclusion. We propose that rIII enhances the on-rate of Nun at nutL, stimulating Nun-mediated arrest in vitro. We have shown that a specific element in rIII, i.e., box C (G89GUGUGUG), strongly enhances arrest on rIII+ templates. Nun-rIII interactions do not stimulate Nun termination in vivo, presumably because formation of the Nun-nutL complex is normally not rate-limiting in the cell. In contrast to Nun, N is not occluded by Rnc70 and is not efficiently titrated by a nutL-rIII transcript.