A synthetic 67-nt RNA substrate, containing a 32P-labeled cap-1 structure (m7G32pppGm) was specifically cleaved by the influenza virus RNA polymerase (EC 2.7.7.48) to yield a single capped 11-nt fragment capable of directly priming transcription. An analysis of systematic truncations of this RNA substrate demonstrated that an additional nucleotide beyond this cleavage site was required for cleavage. The minimal RNA chain length required for priming activity was found to be 9 nt, while in contrast an RNA chain length of at least 4 nt was required for efficient binding to the viral polymerase. On the basis of these chain length requirements we show that a pool of capped oligonucleotides too short to prime transcription, but long enough to bind with high affinity to the viral polymerase, are potent inhibitors of cap-dependent transcription in vitro.