Bacterial σ factors bind RNA polymerase (E) to form holoenzyme (Eσ), conferring promoter specificity to E and playing a key role in transcription bubble formation. σN is unique among σ factors in its structure and functional mechanism, requiring activation by specialized AAA+ ATPases. EσN forms an inactive promoter complex where the N-terminal σN region I (σN-RI) threads through a small DNA bubble. On the opposite side of the DNA, the ATPase engages σN-RI within the pore of its hexameric ring. Here, we perform kinetics-guided structural analysis of de novo formed EσN initiation complexes and engineer a biochemical assay to measure ATPase-mediated σN-RI translocation during promoter melting. We show that the ATPase exerts mechanical action to translocate about 30 residues of σN-RI through the DNA bubble, disrupting inhibitory structures of σN to allow full transcription bubble formation. A local charge switch of σN-RI from positive to negative may help facilitate disengagement of the otherwise processive ATPase, allowing subsequent σN disentanglement from the DNA bubble.