The 76 kb yeast mitochondrial genome carries 35 genes (8 mRNAs, 2 rRNAs, 24 tRNAs and RPM1). These mitochondrial genes are transcribed from octanucleotide promoter sequences by a nuclearly encoded mtRNA polymerase. However, we have shown that the octanucleotide promoter sequence and more than 10 nt nonconserved sequence 3' of the promoter were absolutely essential for promoter-specific transcription. The nucleotide substitution promoter mutagenesis study has suggested that the octanucleotide promoter might have two functional domains. Nucleotides between positions -7 and -2 might participate in polymerase binding whereas nucleotides between positions -1 and +2 probably regulate initiation of transcription. The 3' flanking nucleotide(s) of the octanucleotide promoter sequence regulates transcriptional efficiency of some yeast mitochondrial genes. The in vitro transcription analysis of various synthetic mitochondrial promoters carrying different 3' flanking sequences has shown that the consecutive thymidine residues between positions +2 and +7, but no other polynucleotides or secondary structure, in the promoter-proximal non-transcribed DNA strand inhibited mitochondrial transcription. The location and the number of T residues in the cluster as well as the concentration of UTP in the transcription reaction are the important contributors to this inhibition of transcription. These results support the functional similarity between the yeast mtRNA polymerase and the bacteriophage T3/T7 RNA polymerases.