The mammalian cyclin-dependent kinase 8 (cdk8) gene has been linked with a subset of acute lymphoblastic leukaemias, and its corresponding protein has been functionally implicated in regulation of transcription. Mammalian cdk8 and cyclin C, and their respective yeast homologues, Srb10 and Srb11, are components of the RNA polymerase II holoenzyme complex where they function as a protein kinase that phosphorylates the carboxy-terminal domain (CTD) of the largest subunit of RNA polymerase II (ref. 7). The yeast SRB10 and SRB11 genes have been implicated in the negative regulation of transcription. The cdk8/cyclin C protein complex is also found in a number of mammalian Mediator-like protein complexes, which repress activated transcription independently of the CTD in vitro. Here we show that cdk8/cyclin C can regulate transcription by targeting the cdk7/cyclin H subunits of the general transcription initiation factor IIH (TFIIH). cdk8 phosphorylates mammalian cyclin H in the vicinity of its functionally unique amino-terminal and carboxy-terminal alpha-helical domains. This phosphorylation represses both the ability of TFIIH to activate transcription and its CTD kinase activity. In addition, mimicking cdk8 phosphorylation of cyclin H in vivo has a dominant-negative effect on cell growth. Our results link the Mediator complex and the basal transcription machinery by a regulatory pathway involving two cyclin-dependent kinases. This pathway appears to be unique to higher organisms.