The transcription error rate estimated from mistakes in end product RNAs is 10−3–10−5. We analyzed the fidelity of nascent RNAs from all actively transcribing elongation complexes (ECs) in Escherichia coli and Saccharomyces cerevisiae and found that 1–3% of all ECs in wild-type cells, and 5–7% of all ECs in cells lacking proofreading factors are, in fact, misincorporated complexes. With the exception of a number of sequence-dependent hotspots, most misincorporations are distributed relatively randomly. Misincorporation at hotspots does not appear to be stimulated by pausing. Since misincorporation leads to a strong pause of transcription due to backtracking, our findings indicate that misincorporation could be a major source of transcriptional pausing and lead to conflicts with other RNA polymerases and replication in bacteria and eukaryotes. This observation implies that physical resolution of misincorporated complexes may be the main function of the proofreading factors Gre and TFIIS. Although misincorporation mechanisms between bacteria and eukaryotes appear to be conserved, the results suggest the existence of a bacteria-specific mechanism(s) for reducing misincorporation in protein-coding regions. The links between transcription fidelity, human disease, and phenotypic variability in genetically-identical cells can be explained by the accumulation of misincorporated complexes, rather than mistakes in mature RNA.