APPLICANT'S DESCRIPTION: The overall goal of the proposed research is to test a series of hypothesis concerned with the role of CTD phosphatase in the regulation of RNA polymerase (RNAP) II activity. The largest subunit of RNAP II contains at its C-terminus an unusual domain comprised of multiple repeats of the consensus sequence YSPTSPS. RNAP IIA, which contains an unmodified CTD, is recruited to the promoter as part of the preinitiation complex whereas RNAP 110, which contains a hyperphosphorylated CTD, is responsible for transcript elongation. Increasing evidence supports the idea that a fully phosphorylated CTD is essential for processive elongation. The basic hypothesis that is being tested in this proposal is that dephosphorylation of RNAP 110 in elongation complexes is a regulated process and that CTD phosphatase can play a direct role in the regulation of gene expression. The substrate specificity and mechanism of action of mammalian CTD phosphatase will be examined. A multiplicity of CTD kinases exists with a preference for the phosphorylation of specific positions within the consensus repeat. The extent to which CTD phosphatase can dephosphorylate specific RNAP 110 isomers will be determined. Experiments are proposed to establish the mechanism by which TFIIF stimulates CTD phosphatase activity and TFIIB inhibits activity. The directionality of dephosphoiylation, N- to C-terminus or C- to N-terminus, will also be established. A primary objective of these studies is to define the parameters that govern the sensitivity of RNAP 110 in elongation complexes to dephosphorylation by CTD phosphatase. The interaction site of CTD phosphatase on the surface of RNAP II will be determined and its relationship to structural features of the enzyme established. The experimental approach involves the conjugation of a small metal chelate to surface exposed lysines on CTD phosphatase followed by mapping of the cleavage sites on the two largest RNAP II subunits. Elongation complexes will be formed in vitro by transcription from the adenovirus-2 major late promoter and the nature of factors that influence their sensitivity to CTD phosphatase will be established. Finally, the yeast two-hybrid screen will be used to isolated CTD phosphatase interacting proteins in an effort to identify cellular proteins directly involved in the regulation of phosphatase activity.