The activity of COOH-terminal domain phosphatase is regulated by a docking site on RNA polymerase II and by the general transcription factors IIF and IIB.

Each cycle of transcription appears to be associated with the reversible phosphorylation of the repetitive COOH-terminal domain (CTD) of the largest RNA polymerase (RNAP) II subunit. The dephosphorylation of RNAP II by CTD phosphatase, therefore, plays an important role in the transcription cycle. The following studies characterize the activity of HeLa cell CTD phosphatase with a special emphasis on the regulation of CTD phosphatase activity. Results presented here suggest that RNAP II contains a docking site for CTD phosphatase that is essential in the dephosphorylation reaction and is distinct from the CTD. This is supported by the observations that (a) phosphorylated recombinant CTD is not a substrate for CTD phosphatase, (b) RNAP IIB, which lacks the CTD, and RNAP IIA are competitive inhibitors of CTD phosphatase and (c) CTD phosphatase can form a stable complex with RNAP II. To test the possibility that the general transcription factors may be involved in the regulation of CTD phosphatase, CTD phosphatase activity was examined in the presence of recombinant or highly purified general transcription factors. TFIIF stimulates CTD phosphatase activity 5-fold. The RAP74 subunit of TFIIF alone contained the stimulatory activity and the minimal region sufficient for stimulation corresponds to COOH-terminal residues 358-517. TFIIB inhibits the stimulatory activity of TFIIF but has no effect on CTD phosphatase activity in the absence of TFIIF. The potential importance of the docking site on RNAP II and the effect of TFIIF and TFIIB in regulating the dephosphorylation of RNAP II at specific times in the transcription cycle are discussed.