Many eukaryotic proteins are regulated by modification with the ubiquitin‐like protein small ubiquitin‐like modifier (SUMO). This linkage is reversed by SUMO proteases, of which there are two in Saccharomyces cerevisiae, Ulp1 and Ulp2. SUMO‐protein conjugation regulates transcription, but the roles of SUMO proteases in transcription remain unclear. We report that Ulp2 is recruited to transcriptionally active genes to control local polysumoylation. Mutant ulp2 cells show impaired association of RNA polymerase II (RNAPII) with, and diminished expression of, constitutively active genes and the inducible CUP1 gene. Ulp2 loss sensitizes cells to 6‐azauracil, a hallmark of transcriptional elongation defects. We also describe a novel chromatin regulatory mechanism whereby histone‐H2B ubiquitylation stimulates histone sumoylation, which in turn appears to inhibit nucleosome association of the Ctk1 kinase. Ctk1 phosphorylates serine‐2 (S2) in the RNAPII C‐terminal domain (CTD) and promotes transcript elongation. Removal of both ubiquitin and SUMO from histones is needed to overcome the impediment to S2 phosphorylation. These results suggest sequential ubiquitin‐histone and SUMO‐histone modifications recruit Ulp2, which removes polySUMO chains and promotes RNAPII transcription elongation.