The transcript cleavage factors GreA and GreB of Escherichia coli are involved in the regulation of transcription elongation. The surface charge distribution analysis of their three-dimensional structures revealed that the N-terminal domains of GreA and GreB contain a small and large basic 'patch,' respectively. To elucidate the functional role of basic patch, mutant Gre proteins were engineered in which the size and charge distribution of basic patch were modified and characterized biochemically. We found that Gre mutants lacking basic patch or carrying basic patch of decreased size bind to RNA polymerase and induce transcript cleavage reaction in minimally backtracked ternary elongation complex (TEC) with the same efficiency as the wild type factors. However, they exhibit substantially lower readthrough and cleavage activities toward extensively backtracked and arrested TECs and display decreased efficiency of photocross-linking to the RNA 3'-terminus. Unlike wild type factors, basic patch-less Gre mutants are unable to complement the thermosensitive phenotype of GreA-:GreB- E. coli strain. The large basic patch is required but not sufficient for the induction of GreB- type cleavage reaction and for the cleavage of arrested TECs. Our results demonstrate that the basic patch residues are not directly involved in the induction of transcript cleavage reaction and suggest that the primary role of basic patch is to anchor the nascent RNA in TEC. These interactions are essential for the readthrough and antiarrest activities of Gre factors and, apparently, for their in vivo functions.