The synthesis of ribonucleic acid (RNA) during development of the virulent Bacillus subtilis bacteriophage phi29 has been analyzed. Transcription of host deoxyribonucleic acid (DNA) continues at the preinfection rate throughout the latent period of viral growth. RNA-DNA hybridization was used to show that host messenger RNA synthesis continues late into the phage lytic cycle. Amino acid-labeling experiments show that this RNA is continuously used to produce protein. Ribosomal RNA production is not inhibited by phage infection. Small quantities of phage-specific RNA first appear between min 6 and 9 after infection. This RNA is made exclusively from one of the phi29 DNA strands. At 12 min postinfection, when phage DNA replication commences, large quantities of viral RNA start to be synthesized. This RNA appears to be transcribed from both strands of phi29 DNA. Studies with rifamycin and rifamycin-resistant host strains showed that the production of all phage phi29-specific RNA requires those components of the host RNA polymerase which are sensitive to this antibiotic. Thus, phage phi29 does not stop transcription of host DNA and may produce only one element for regulation of transcription of its own DNA. These findings may reflect the limited amount of genetic information carried by this phage.