We have characterized the helicase activity of transcription termination factor rho on a variety of substrates. Helicase activity requires specific recognition of a single-stranded region of RNA upstream (5') of the nucleic acid duplex on which rho acts. Spacer sequences of at least 450 nucleotides can be inserted between the rho-binding signals and the duplex region with little effect on activity. RNA-DNA helices of up to 120 base pairs, but not as long as 210 base pairs, can be disrupted efficiently by rho. The stoichiometry of release of substrates with long spacer sequences, as with the standard substrate, approaches a value of one RNA released per rho hexamer; thus cooperative binding by rho does not account for action at a distance. Instead, these results are consistent with a model in which a single rho hexamer binds initially to terminator sequences and then either loops out or tracks along the intervening RNA to reach the duplex region. Results with complex substrates are inconsistent with looping and support the tracking model: under conditions that allow disruption of RNA-DNA, but not RNA-RNA helices (0.4 mM Mg2+), the presence of a short RNA-RNA helix acts as a block to the disruption of an RNA-DNA helix downstream. These findings are discussed in relation to the mechanism of the helicase activity as well as its role in rho-dependent transcription termination.