Human La protein has been shown to serve as a transcription factor for RNA polymerase III (pol III) by facilitating transcription termination and recycling of transcription complexes. In addition, La binds to the 3' oligo(U) ends common to all nascent pol III transcripts, and in the case of B1-Alu RNA, protects it from 3'-end processing (R. J. Maraia, D. J. Kenan, and J. D. Keene, Mol. Cell. Biol. 14:2147-2158, 1994). Others have previously dissected the La protein into an N-terminal domain that binds RNA and a C-terminal domain that does not. Here, deletion and substitution mutants of La were examined for general RNA binding, RNA 3'-end protection, and transcription factor activity. Although some La mutants altered in a C-terminal basic region bind RNA in mobility shift assays, they are defective in RNA 3'-end protection and do not support transcription, while one C-terminal substitution mutant is defective only in transcription. Moreover, a C-terminal fragment lacking RNA binding activity appears able to support low levels of transcription by pol III. While efficient multiround transcription is supported only by mutants that bind RNA and contain a C-terminal basic region. These analyses indicate that RNA binding contributes to but is not sufficient for La transcription factor activity and that the C-terminal domain plays a role in transcription that is distinguishable from simple RNA binding. The transcription factor activity of La can be reversibly inhibited by RNA, suggesting the potential for feedback inhibition of pol III transcription.