Novobiocin concentrations normally used to inhibit a putative eukaryotic DNA gyrase have been found to inhibit transcription of a yeast 5S rRNA gene using an in vitro yeast transcription system. Purified RNA polymerase III and three yeast transcription factors (chromatographically separated, partially purified and free of any detectable gyrase activity) were used. Novobiocin prevents specific transcription if added to the in vitro system immediately prior to the addition of transcription factors and RNA polymerase. If a stable transcription factor complex is allowed to form prior to the addition of novobiocin, concentrations of novobiocin as high as 1000 micrograms/ml have no effect on in vitro transcription. Transcription factors TFIIIA and TFIIIC are able to be stably sequestered onto 5SrDNA-cellulose, but factor TFIIIB is not able to associate with the 5SrDNA-TFIIIA-TFIIIC complex in the presence of novobiocin. Although novobiocin is able to precipitate other basic proteins, it does not appear to precipitate any of these class III gene transcription factors, but instead appears to act by disrupting specific factor-factor interactions.