The C53 and C37 subunits of RNA polymerase III (pol III) form a subassembly that is required for efficient termination; pol III lacking this subcomplex displays increased processivity of RNA chain elongation. We show that the C53/C37 subcomplex additionally plays a role in formation of the initiation-ready open promoter complex similar to that of the Brf1 N-terminal zinc ribbon domain. In the absence of C53 and C37, the transcription bubble fails to stably propagate to and beyond the transcriptional start site even when the DNA template is supercoiled. The C53/C37 subcomplex also stimulates the formation of an artificially assembled elongation complex from its component DNA and RNA strands. Protein-RNA and protein-DNA photochemical cross-linking analysis places a segment of C53 close to the RNA 3' end and transcribed DNA strand at the catalytic center of the pol III elongation complex. We discuss the implications of these findings for the mechanism of transcriptional termination by pol III and propose a structural as well as functional correspondence between the C53/C37 subcomplex and the RNA polymerase II initiation factor TFIIF.