Fidaxomicin is an antibacterial drug in clinical use for treatment of Clostridium difficile diarrhea. The active ingredient of fidaxomicin, lipiarmycin A3 (Lpm), functions by inhibiting bacterial RNA polymerase (RNAP). Here we report a cryo-EM structure of Mycobacterium tuberculosis RNAP holoenzyme in complex with Lpm at 3.5-Å resolution. The structure shows that Lpm binds at the base of the RNAP "clamp." The structure exhibits an open conformation of the RNAP clamp, suggesting that Lpm traps an open-clamp state. Single-molecule fluorescence resonance energy transfer experiments confirm that Lpm traps an open-clamp state and define effects of Lpm on clamp dynamics. We suggest that Lpm inhibits transcription by trapping an open-clamp state, preventing simultaneous interaction with promoter -10 and -35 elements. The results account for the absence of cross-resistance between Lpm and other RNAP inhibitors, account for structure-activity relationships of Lpm derivatives, and enable structure-based design of improved Lpm derivatives.