Abstract: Messenger RNA processing is coupled to RNA polymerase II (RNAPII) transcription through coordinated recruitment of accessory proteins to the Rpb1 C-terminal domain (CTD). Dynamic changes in CTD phosphorylation during transcription elongation are responsible for their recruitment, with serine 5 phosphorylation (S5-P) occurring toward the 5' end of genes and serine 2 phosphorylation (S2-P) occurring toward the 3' end. The proteins responsible for regulation of the transition state between S5-P and S2-P CTD remain elusive. We show that a conserved protein of unknown function, Rtr1, localizes within coding regions, with maximum levels of enrichment occurring between the peaks of S5-P and S2-P RNAPII. Upon deletion of Rtr1, the S5-P form of RNAPII accumulates in both whole-cell extracts and throughout coding regions; additionally, RNAPII transcription is decreased, and termination defects are observed. Functional characterization of Rtr1 reveals its role as a CTD phosphatase essential for the S5-to-S2-P transition.