Premature termination of transcription is assumed to be an important mechanism of c-myc regulation. Induction of terminal differentiation in the promyelocytic leukemia cell line HL60 by dimethyl-sulfoxide (DMSO) is accompanied by a block of RNA elongation within the first exon of the c-myc gene. We have studied the 3'-structure of incompletely elongated transcripts in (i) nuclear RNA of induced and uninduced HL60 cells, (ii) nuclear run-on RNA, and (iii) RNA of in vitro transcribed c-myc constructs. Elongation of c-myc RNA stopped in all three transcriptional systems at similar sites distributed 150-350 bases downstream of the P2 promoter. When HL60 cells were induced to terminal differentiation the short c-myc exon 1 specific RNAs disappeared in nuclear RNA. This implied that RNA polymerase II (pol II) does not continue to transcribe c-myc exon 1 in induced HL60 cells as suggested by earlier nuclear run-on experiments. Therefore, kinetic experiments with small oligonucleotides as probes were performed to determine the start position of pol II on c-myc exon 1 in nuclear run-ons. The results demonstrate that all RNA polymerases are localized at the c-myc P2 promoter in DMSO-treated HL60 cells. Preparation of nuclei for run-on experiments induces a release of pol II from the c-myc P2 promoter leading to the strong nuclear run-on signal on c-myc exon 1. Thus, down-regulation of c-myc in differentiating HL60 cells occurs by retention of pol II at the transcription start site.