The Lyme disease spirochete Borrelia burgdorferi exhibits dramatic changes in gene expression as it transits between its tick vector and vertebrate host. A major hurdle to understanding the mechanisms underlying gene regulation in B. burgdorferi has been the lack of a functional assay to test how gene regulatory proteins and sigma factors interact with RNA polymerase to direct transcription. To gain mechanistic insight into transcriptional control in B. burgdorferi, and address sigma factor function and specificity, we developed an in vitro transcription assay using the B. burgdorferi RNA polymerase holoenzyme. We established reaction conditions for maximal RNA polymerase activity by optimizing pH, temperature, and the requirement for divalent metals. Using this assay system, we analyzed the promoter specificity of the housekeeping sigma factor RpoD to promoters encoding previously identified RpoD consensus sequences in B. burgdorferi. Collectively, this study established an in vitro transcription assay that revealed RpoD-dependent promoter selectivity by RNA polymerase and the requirement of specific metal cofactors for maximal RNA polymerase activity. The establishment of this functional assay will facilitate molecular and biochemical studies on how gene regulatory proteins and sigma factors exert control of gene expression in B. burgdorferi required for the completion of its enzootic cycle.