A Rho factor acts on an RNA substrate. Rho's key function is its helicase activity, for which energy is provided by an RNA-dependent ATP hydrolysis. The initial binding site for Rho is an extended (~70 nucleotides, sometimes 80–100 nucleotides) single-stranded region, rich in cytosine and poor in guanine, called the rho utilisation site (rut), in the RNA being synthesised, upstream of the actual terminator sequence. Several rho binding sequences have been discovered. No consensus is found among these, but the different sequences each seem specific, as small mutations in the sequence disrupts its function. Rho binds to RNA and then uses its ATPase activity to provide the energy to translocate along the RNA until it reaches the RNA–DNA helical region, where it unwinds the hybrid duplex structure. RNA polymerase pauses at the termination sequence, which is because there is a specific site around 100 nt away from the Rho binding site called the Rho-sensitive pause site. So, even though the RNA polymerase is about 40 nt per second faster than Rho, it does not pose a problem for the Rho termination mechanism as the RNA polymerase allows Rho factor to catch up.
In short, Rho factor acts as an ATP-dependent unwinding enzyme, moving along the newly forming RNA molecule towards its 3′ end and unwinding it from the DNA template as it proceeds.