The characterization in vitro of a newly discovered promoter (Psar) in the bacteriophage P22 immI region is described. Psar is located within the ant gene and is directed toward the major immI promoter, Pant. The entire intercistronic region between the P22 arc and ant genes (69 bp) is transcribed. The initiation and termination of sar (small antisense regulatory) RNA transcription are unusual. Frequent abortive initiation occurs in the presence of all four NTPs; RNA products 3-13 nucleotides in length are produced in about 15- to 25-fold larger numbers than full-length transcripts. Termination of sar RNA synthesis occurs after transcription of the first and second Ts of a TTTA sequence following a region of hyphenated dyad symmetry. The effects of convergent transcription between Pant and Psar were investigated on linear and supercoiled templates. Active transcription from Pant interferes with full-length transcription from Psar; several factors that interfere with Pant initiation (e.g., Pant down-mutation, Mnt repressor protein, Arc repressor protein) result in indirect activation of sar RNA synthesis. The sar RNA pairs rapidly with ant mRNA to form a stable stoichiometric complex. The location and properties of Psar suggest an important regulatory function for sar RNA as a negative effector of ant expression. The results of Wu et al. (this issue) support this suggestion.