Upstream interactions of Escherichia coli RNA polymerase (RNAP) in an open promoter complex (RPo) formed at the P(R) and P(RM) promoters of bacteriophage lambda have been studied by atomic force microscopy. We demonstrate that the previously described 30-nm DNA compaction observed upon RPo formation at P(R) [Rivetti, C., Guthold, M. & Bustamante, C. (1999). Wrapping of DNA around the E. coli RNA polymerase open promoter complex. EMBO J., 18, 4464-4475.] is a consequence of the specific interaction of the RNAP with two AT-rich sequence determinants positioned from -36 to -59 and from -80 to -100. Likewise, RPos formed at P(RM) showed a specific contact between RNAP and the upstream DNA sequence. We further demonstrate that this interaction, which results in DNA wrapping against the polymerase surface, is mediated by the C-terminal domains of alpha-subunits (carboxy-terminal domain). Substitution of these AT-rich sequences with heterologous DNA reduces DNA wrapping but has only a small effect on the activity of the P(R) promoter. We find, however, that the frequency of DNA templates with both P(R) and P(RM) occupied by an RNAP significantly increases upon loss of DNA wrapping. These results suggest that alpha carboxy-terminal domain interactions with upstream DNA can also play a role in regulating the expression of closely spaced promoters. Finally, a model for a possible mechanism of promoter interference between P(R) and P(RM) is proposed.