Rtr1 is a dual specificity phosphatase that dephosphorylates Tyr1 and Ser5 on the RNA polymerase II CTD.

The phosphorylation state of heptapeptide repeats within the C-terminal domain (CTD) of the largest subunit of RNA polymerase II (PolII) controls the transcription cycle and is maintained by the competing action of kinases and phosphatases. Rtr1 was recently proposed to be the enzyme responsible for the transition of PolII into the elongation and termination phases of transcription by removing the phosphate marker on serine 5, but this attribution was questioned by the apparent lack of enzymatic activity. Here we demonstrate that Rtr1 is a phosphatase of new structure that is auto-inhibited by its own C-terminus. The enzymatic activity of the protein in vitro is functionally important in vivo as well: a single amino acid mutation that reduces activity leads to the same phenotype in vivo as deletion of the protein-coding gene from yeast. Surprisingly, Rtr1 dephosphorylates not only serine 5 on the CTD but also the newly described anti-termination tyrosine 1 marker, supporting the hypothesis that Rtr1 and its homologs promote the transition from transcription to termination.