The synthesis of mRNA by RNA polymerase II (RNAPII) is a multistep process that is regulated by different mechanisms. One important aspect of transcriptional regulation is phosphorylation of components of the transcription apparatus. The phosphorylation state of RNAPII carboxy-terminal domain (CTD) is controlled by a variety of protein kinases and at least one protein phosphatase. We discuss emerging genetic and biochemical evidence that points to a role of these factors not only in transcription initiation but also in elongation and possibly termination. In addition, we review phosporylation events involving some of the general transcription factors (GTFs) and other regulatory proteins. As an interesting example, we describe the modulation of transcription associated kinases and phosphatase by the HIV Tat protein. We focus on bringing together recent findings and propose a revised model for the RNAPII phosphorylation cycle.