Free and elongating (DNA-bound) forms of RNA polymerase II were separated from yeast. Most cellular polymerase II was found in the elongating fraction, which contained all enzyme phosphorylated on the C-terminal domain and none of the 15-subunit mediator of transcriptional regulation. These and other findings suggest that mediator enters and leaves initiation complexes during every round of transcription, in a process that may be coupled to C- terminal domain phosphorylation.