The C-terminal domain (CTD) of the largest subunit of RNA polymerase II (RNAP II) consists of repeated YSPTSPS heptapeptides and connects transcription with cotranscriptional events. Threonine-4 (Thr4) of the CTD repeats has been shown to function in histone mRNA 3′-end processing in chicken cells and in transcriptional elongation in human cells. Here, we demonstrate that, in budding yeast, Thr4, although dispensable for growth in rich media, is essential in phosphate-depleted or galactose-containing media. Thr4 is required to maintain repression of phosphateregulated (PHO) genes under normal growth conditions and for full induction of PHO5 and the galactose-induced GAL1 and GAL7 genes. We identify genetic links between Thr4 and the histone variant Htz1 and show that Thr4, as well as the Ino80 chromatin remodeler, is required for activation-associated eviction of Htz1 specifically from promoters of the Thr4-dependent genes. Our study uncovers a connection between transcription and chromatin remodeling linked by Thr4 of the CTD.H2A.Z | SWRc I n eukaryotic cells, RNA polymerase II (RNAP II) transcribes all protein coding genes as well as a number of noncoding RNA genes, including those for most snRNAs and microRNAs. Expression of RNAP II-transcribed genes is highly regulated, ensuring that the timing of production, quantity, and structure of the RNAs generated is appropriate. Much of this regulation occurs on the genes themselves, whose accessibility is limited by nucleosomes that can form densely packed chromatin (reviewed in refs. 1 and 2). A significant amount of regulation, however, targets RNAP II itself. Specifically, the C-terminal domain (CTD) of Rpb1, the largest subunit of RNAP II, is subject to a multitude of phosphorylation and dephosphorylation events that mark different steps of the RNAP II transcription cycle (recently reviewed in refs. 3-5). Although many of these modifications occur generally, some appear to play critical roles in expression of specific genes (6-8). The CTD consists of a tandemly repeated heptapeptide, whose consensus sequence, Tyr , is conserved in yeast, which harbors 26 repeats, and vertebrates, with 52 repeats. The emerging picture places this unusual structure in a highly important role in coordinating transcription by RNAP II with other events in the generation and maturation of RNAs.Since its discovery, numerous studies have focused on the role of the entire CTD and the function of individual amino acids within its repeats. At promoters, the unphosphorylated CTD interacts directly with subunits of the Mediator complex (9), which is required for Mediator's role in stimulating transcription (10). Additionally, early studies determined that the CTD is required for full activation by some promoter-bound activators (11-13) whereas it was later shown that the CTD can mediate the influence of activators on pre-mRNA processing (14-16).Several genome-wide analyses uncovered a pattern of CTD phosphorylation that occurs once RNAP II clears promoters (e.g., refs. 17 and 18). Phosphory...