The C34 subunit of yeast RNA polymerase (pol) III is part of a subcomplex of three subunits which have no counterpart in the other two nuclear RNA polymerases. This subunit interacts with TFIIIB70 and is therefore thought to participate in pol III recruitment. To study the role of C34 in transcription, we have mutagenized RPC34, the gene encoding C34, and found that mutations affecting growth also altered C34 interaction with TFIIIB70. The two mutant pol III that were purified had catalytic properties indistinguishable from those of the wild-type pol III on a poly[d(A-T)] template, while specific transcription of pol III genes in the presence of general transcription factors was impaired. The defect of the C34-1124 mutant enzyme could be compensated by increasing the amount of pol III present in the reaction, suggesting that the enzyme had a lower affinity for pre-initiation complexes. In contrast, the C34-1109 mutant enzyme was defective in transcription initiation due to impaired open complex formation. These observations demonstrate that the C34 subunit is a major determinant in pol III recruitment by the pre-initiation complex and further acts at a subsequent stage that involves the configuration of an initiation-competent form of RNA polymerase.