We show that transcription induced by nuclear receptors for estrogen (E2) or retinoic acid (RA) is associated with formation of chromatin loops that juxtapose the 5' end (containing the promoter) with the enhancer and the 3' polyA addition site of the target gene. We find three loop configurations which change as a function of time after induction: 1. RA or E2-induced loops which connect the 5' end, the enhancer and the 3' end of the gene, and are stabilized by RNA early after induction; 2. E2-independent loops whose stability does not require RNA; 3. Loops detected only by treatment of chromatin with RNAse H1 prior to hormonal induction. RNAse H1 digests RNA that occludes the relevant restriction sites, thus preventing detection of these loops. R-loops at the 5' and 3' ends of the RA or E2-target genes were demonstrated by immunoprecipitation with anti-DNA-RNA hybrid antibodies as well as by sensitivity to RNAse H1. The cohesin RAD21 subunit is preferentially recruited to the target sites upon RA or E2 induction of transcription. RAD21 binding to chromatin is eliminated by RNAse H1. We identified E2-induced and RNase H1-sensitive antisense RNAs located at the 5' and 3' ends of the E2-induced transcription unit which stabilize the loops and RAD21 binding to chromatin. This is the first report of chromatin loops that form after gene induction that are maintained by RNA:DNA hybrids.