Many bacteriophages modulate host transcription to favor expression of their own genomes. Phage satellite P4 polarity suppression protein, Psu, a building block of the viral capsid, inhibits hexameric transcription termination factor, rho, by presently unknown mechanisms. Our cryogenic electron microscopy structures of rho-Psu complexes show that Psu dimers clamp two inactive, open rho rings and promote their expansion to higher-oligomeric states. ATPase, nucleotide binding and nucleic acid binding studies revealed that Psu hinders rho ring closure and traps nucleotides in their binding pockets on rho. Structure-guided mutagenesis in combination with growth, pull-down, and termination assays further delineated the functional rho-Psu interfaces in vivo. Bioinformatic analyses revealed that Psu is associated with a wide variety of phage defense systems across Enterobacteriaceae, suggesting that Psu may regulate expression of anti-phage genes. Our findings show that modulation of the rho oligomeric state via diverse strategies is a pervasive gene regulatory principle in bacteria.