The conserved bacterial transcription terminator, Rho, is a potent target for bactericidal agents. Psu, a bacteriophage P4 capsid protein, is capable of inducing anti-termination to the Rho-dependent transcription termination. Knowledge of structural and mechanistic basis of this anti-termination is required to design peptide-inhibitor(s) of Rho from Psu. Using suppressor genetics, cross-linking, protein foot-printing and FRET analyses, we describe a conserved disordered structure, encompassing 139-153 amino acids of Rho, as the primary docking site for Psu. Also a neighbouring helical structure, comprising 347-354 amino acids, lining its central channel, plays a supportive role in the Rho-Psu complex formation. Based on the crystal structure of Psu, its conformation in the capsid of the P4 phage, and its interacting regions on Rho, we build an energy-minimized structural model of the Rho:Psu complex. In this model, a V-shaped dimer of Psu interacts with the two diagonally opposite subunits of a hexameric Rho, enabling Psu to form a 'lid' on the central channel of the latter. We show that this configuration of Psu makes the central channel of Rho inaccessible, and it causes a mechanical impediment to its translocase activity.