Transcription by RNA polymerase (RNAP) in bacteria requires specific promoter recognition by sigma factors. The major variant s factor (sigma(54)) initially forms a transcriptionally silent complex requiring specialized adenosine triphosphate-dependent activators for initiation. Our crystal structure of the 450-kilodalton RNAP-sigma(54) holoenzyme at 3.8 angstroms reveals molecular details of sigma(54) and its interactions with RNAP. The structure explains how sigma(54) targets different regions in RNAP to exert its inhibitory function. Although sigma(54) and the major s factor, sigma(70), have similar functional domains and contact similar regions of RNAP, unanticipated differences are observed in their domain arrangement and interactions with RNAP, explaining their distinct properties. Furthermore, we observe evolutionarily conserved regulatory hotspots in RNAPs that can be targeted by a diverse range of mechanisms to fine tune transcription.