The form of RNA polymerase II (RNAPII) engaged in transcriptional elongation was isolated. Elongating RNAPII was associated with a novel multisubunit complex, termed elongator, whose stable interaction was dependent on a hyperphosphorylated state of the RNAPII carboxy-terminal domain (CTD). A free form of elongator was also isolated, demonstrating the discrete nature of the complex, and free elongator could bind directly to RNAPII. The gene encoding the largest subunit of elongator, ELP1, was cloned. Phenotypes of yeast elp1Δ, cells demonstrated an involvement of elongator in transcriptional elongation as well as activation in vivo. Our data indicate that the transition from transcriptional initiation to elongation involves an exchange of the multiprotein mediator complex for elongator in a reaction coupled to CTD hyperphosphorylation.