R-loops are structures containing an RNA-DNA duplex and an unpaired DNA strand. They can be formed upon "invasion" of an RNA strand into a DNA duplex, during which the RNA displaces the homologous DNA strand and binds the complementary strand. R-loops have many significant beneficial or deleterious biological effects, so it is important to understand the mechanisms for their generation and processing. We propose a model for co-transcriptional R-loop formation, in which their generation requires passage of the nascent RNA "tail" through the gap between the separated DNA strands. This passage becomes increasingly difficult with lengthening of the RNA tail. The length of the tail increases upon increasing distance between the transcription start site and the site of R-loop initiation. This causes reduced yields of R-loops with greater distance from the transcription start site. However, alternative pathways for R-loop formation are possible, involving either transient disruption of the transcription complex or the hypothetical formation of a triple-stranded structure, as a "collapsed R-loop." These alternative pathways could account for the fact that in many systems R-loops are observed very far from the transcription start site. Our model is consistent with experimental data and makes general predictions about the kinetics of R-loop formation.