Abbreviations: CDK, cyclin-dependent kinase; CTD, C-terminal domain of the RNA polymerase II; DSIF, DRB sensitivity-inducing factor; H3K4me3, histone H3 trimethylated at lysine 4; H3K36me3, histone H3 trimethylated at lysine 36; H3S10, histone H3 serine 10; NELF, negative elongation factor complex; P-TEFb, positive transcription elongation factor b; PP, protein phosphatase; p21 CIP1 , cyclin-dependent kinase inhibitor 1A; RNA Pol II, RNA polymerase II; SUMO, small ubiquitin-related modifier T he transition of paused RNA polymerase II into productive elongation is a highly dynamic process that serves to fine-tune gene expression in response to changing cellular environments. We have recently reported that the transcription factor Sp3 inhibits the transition of paused RNA Pol II to productive elongation at the promoter of the cyclin-dependent kinase inhibitor p21 CIP1 and other Sp3-repressed genes. Our studies support the view that Sp3 has three modes of action: activation, SUMO-Sp3-mediated heterochromatin silencing and SUMOindependent inhibition of elongation. At the p21 CIP1 promoter, binding of the positive elongation factor P-TEFb kinase was not affected by Sp3. In contrast, Sp3 promoted binding of the protein phosphatase PP1 to the p21 CIP1 promoter, suggesting that Sp3-dependent regulation of the local balance between kinase and phosphatase activities may contribute to gene expression. Our findings show that the transition of paused RNA Pol II to productive elongation is an important step regulated by both promoter-specific activators and repressors to finely modulate mRNA expression levels.