Transcription by T7 RNA polymerase has been studied using a chiral ATP analogue. The Sp diastereoisomer of adenosine 5'-O-(1-thiotriphosphate) (ATP alpha S) was incorporated into RNA with an apparent KM of approximately 15 microM, similar to that for ATP; the Rp diastereoisomer was neither a substrate nor a competitive inhibitor. The configuration of the phosphodiester link in the RNA produced was analyzed with stereospecific nucleases. The rate of nuclease digestion was compared with the rate of digestion of phosphorothioate-substituted RNA of known stereochemistry synthesized by E. coli RNA polymerase. Surprisingly, the nucleases exhibited reduced discrimination compared with their activity on dinucleotides. The results show that phosphorothioate-substituted RNA transcribed by T7 RNA polymerase has the same configuration as that transcribed by E. coli RNA polymerase, ie. Rp. Thus, the reaction proceeds with inversion of configuration at phosphorus.