Controlling efficiency and fidelity in the early stage of mitochondrial DNA transcription is essential for regulating cellular energy metabolism. Studies of bacteriophage and bacterial systems have revealed that transcription occurs through a series of conformational transitions during the initiation and elongation stages; however, how the conformational dynamics progress throughout these stages remains unknown. Here, we used single- molecule fluorescence resonance energy transfer (smFRET) techniques to examine the conformational dynamics of the two- component transcription system of yeast mitochondrial RNAP (Rpo41) and mitochondrial transcription initiation factor (Mtf1) with single-base resolution. Transcription systems in bacteriophages and mitochondria share common promoter recognition mechanisms. However, as we show that, unlike its single-component homologue in bacteriophages, the yeast mitochondrial transcription initiation complex dynamically transitions between closed, open, and scrunched conformations throughout the initiation stage, and then makes a sharp irreversible transition to an unbent conformation by promoter release at position +8. Remarkably, stalling the initiation complex revealed unscrunching dynamics without dissociating the RNA transcript, manifesting the existence of backtracking transitions with possible regulatory roles. The dynamic landscape of transcription initiation revealed here suggests a kinetically driven regulation of mitochondrial transcription.