In both natural and engineered biological systems, RNA-guided proteins have emerged as critical transcriptional regulators by modulating RNA polymerase (RNAP) and its associated factors1–3. In bacteria, diverse clades of repurposed TnpB and CRISPR-associated proteins repress gene expression by blocking transcription initiation or elongation, enabling non-canonical modes of regulatory control and adaptive immunity1,4,5. A distinct class of nuclease-dead Cas12f homologues (dCas12f) instead activates gene expression through its association with unique extracytoplasmic function sigma factors (σE)6, although the molecular basis has remained elusive. Here we reveal a new mode of RNA-guided transcription initiation by determining the cryo-electron microscopy structures of the dCas12f–σE system from Flagellimonas taeanensis. We captured multiple conformational and compositional states, including the DNA-bound dCas12f–σE–RNAP holoenzyme complex, revealing how RNA-guided DNA binding leads to σE–RNAP recruitment and nascent mRNA synthesis at a precisely defined distance downstream of the R-loop. Rather than following the classical paradigm of σE-dependent promoter recognition, these studies show that recognition of the −35 element is largely supplanted by CRISPR–Cas targeting, whereas the melted −10 element is stabilized through unusual stacking interactions rather than insertion into the typical recognition pocket. Collectively, this work provides high-resolution insights into an unexpected mechanism of RNA-guided transcription, expanding our understanding of bacterial gene regulation and opening new avenues for programmable transcriptional control.