Transcription of genomic DNA of all organisms is carried out by members of the multi-subunit RNA polymerase family. Regulation of RNA polymerase localization and activity underlies cellular homeostasis, division, and response to environmental cues. The catalytic mechanism, overall architecture, and many sequence and structural features of bacterial RNA polymerase are conserved in its Archaeal and Eukaryotic counterparts. The human RNA polymerase II (Pol II) is responsible for transcription of all protein-coding and many non-coding genes. The majority of current knowledge on RNA polymerases and their mechanism at different steps in transcription derives from extensive work done using classical biochemical, genetic and structural biology methods. However, the use of single-molecule approaches addressed crucial questions on the function and mechanism of RNA polymerases during transcription, which were not possible to answer with ensemble-based approaches due to averaging effects. A useful fluorescence-based single-molecule technique to measure distances on the molecular scale and monitor dynamics is F�rster resonance energy transfer (FRET). Here, I report on the development of diffusion-based single-molecule FRET (smFRET) methods to investigate different steps in transcription by the in vitro reconstituted human Pol II system. Using an assay that monitors the FRET changes between fluorescent dyes in the unwound region of promoter DNA (transcription bubble), I demonstrated the effect of certain components of the reconstituted system on the relative size of the transcription bubble. I also detail the optimizations done to enhance the affinity of single-stranded DNA (ssDNA) FRET probes to complementary target sequences. These ssDNA FRET probes were used to investigate the effect of certain components of the reconstituted system on Pol II activity by measuring the relative levels of RNA product. In addition to studies on the Pol II system, I report on the effect of the 5’-group of nascent RNA on the stability of the Escherichia coli RNA polymerase (RNAP) transcription bubble. I show how the presence of a 5’-monophosphate appears to destabilize the open bubble while a 5’-hydroxyl has no effect. Finally, I describe the work done on a project I took part in that identified a previously uncharacterized RNAP paused complex in initiation. We demonstrate that RNAP complexes undergoing initial transcription can enter the inactive paused state by backtracking. I also demonstrate how the presence of a 5’-triphosphate rapidly enhances entrance of RNAP complexes undergoing initial transcription into an inactive paused complex.