In Escherichia coli, the essential motor protein Rho promotes transcription termination in a tightly controlled manner that is not fully understood. Here, we show that the general post-transcriptional regulatory protein Hfq associates with Rho to regulate Rho function. The Hfq:Rho complex can be further stabilized by RNA bridging both factors in a configuration that inhibits the ATP hydrolysis and duplex unwinding activities of Rho and that mediates transcription antitermination at Rho-dependent terminators in vitro and in vivo. Antitermination at a prototypical terminator (λtR1) requires Hfq binding to an A/U-rich transcript region directly upstream from the terminator. Antitermination is modulated by trans-acting factors (NusG or nucleic acid competitors) that affect Hfq association with Rho or RNA. These data unveil a new Hfq function and a novel transcription regulatory mechanism with potentially important implications for bacterial RNA metabolism, gene silencing, and pathogenicity.