A protein phosphatase functions to recycle RNA polymerase II

Transcription is regulated by the state of phosphorylation of a heptapeptid e repeat known as the carboxy-terminal domain (CTD) present in the largest subunit of RNA polymerase II (RNAPII). RNAPII that associates with transcri ption initiation complexes contains an unphosphorylated CTD, whereas the el ongating polymerase has a phosphorylated CTD. Transcription factor III-I ha s a kinase activity specific for the CTD that is stimulated by the formatio n of a transcription initiation complex. Here, we report the isolation of a cDNA clone encoding a 150-kD polypeptide, which, together with RNAPII, rec onstitutes a highly specific CTD phosphatase activity. Functional analysis demonstrates that the CTD phosphatase allows recycling of RNAPII. The phosp hatase dephosphorylates the CTD allowing efficient incorporation of RNAPII into transcription initiation complexes, which results in increased transcr iption. The CTD phosphatase was found to be active in ternary elongation co mplexes. Moreover, the phosphatase stimulates elongation by RNAPII; however , this function is independent of its catalytic activity.