Transcriptional interference between genes and the regulatory elements of simple eukaryotes such as Saccharomyces cerevisiae is an unavoidable consequence of their compressed genetic arrangement. We have shown previously that with the tandem arranged genes GAL10 and GAL7, inefficient transcriptional termination of the upstream gene inhibits initiation of transcription on the downstream gene. We now show that transcriptional interference can occur also with S. cerevisiae RNA polymerase II genes arranged convergently. We demonstrate that when the GAL10 and GAL7 genes are rearranged in a convergent orientation, transcriptional initiation occurs at full levels. However, as soon as the two transcripts begin to overlap, elongation is restricted, resulting in a severe reduction in steady-state mRNA accumulation. This effect is observed only in cis arrangement, arguing against RNA-interference effects acting on the potential generation of antisense transcripts. These data reinforce the necessity of separating adjacent RNA polymerase II transcription units by efficient termination signals.