Pausing during transcription elongation is a fundamental activity in all kingdoms of life. In bacteria, the essential protein NusA modulates transcriptional pausing, but its mechanism of action has remained enigmatic. By combining structural and functional studies we show that a helical rearrangement induced in NusA upon interaction with RNA polymerase is the key to its modulatory function. This conformational change leads to an allosteric repositioning of conserved basic residues that could enable their interaction with an RNA pause hairpin that forms in the exit channel of the polymerase. This weak interaction would stabilize the paused complex and increases the duration of the transcriptional pause. Allosteric spatial re-positioning of regulatory elements may represent a general approach used across all taxa for modulation of transcription and protein-RNA interactions.