The function of human TFIIH-associated Cdk7 in RNA polymerase II (Pol II) transcription and C-terminal domain (CTD) phosphorylation was investigated in analogue-sensitive Cdk7^as/as mutant cells where the kinase can be inhibited without disrupting TFIIH. We show that both Cdk7 and Cdk9/PTEFb contribute to phosphorylation of Pol II CTD Ser5 residues on transcribed genes. Cdk7 is also a major kinase of CTD Ser7 on Pol II at the c-fos and U snRNA genes. Furthermore, TFIIH and recombinant Cdk7-CycH-Mat1 as well as recombinant Cdk9-CycT1 phosphorylated CTD Ser7 and Ser5 residues in vitro. Inhibition of Cdk7 in vivo suppressed the amount of Pol II accumulated at 5′ ends on several genes including c-myc, p21, and glyceraldehyde-3-phosphate dehydrogenase genes, indicating reduced promoter-proximal pausing or polymerase “leaking” into the gene. Consistent with a 5′ pausing defect, Cdk7 inhibition reduced recruitment of the negative elongation factor NELF at start sites. A role of Cdk7 in regulating elongation is further suggested by enhanced histone H4 acetylation and diminished histone H4 trimethylation on lysine 36—two marks of elongation—within genes when the kinase was inhibited. Consistent with a new role for TFIIH at 3′ ends, it was detected within genes and 3′-flanking regions, and Cdk7 inhibition delayed pausing and transcription termination.