General transcription factor IIH (TFIIH) consists of nine subunits: cyclin-dependent kinase 7 (Cdk7), cyclin H and MAT1 (forming the Cdk-activating-kinase or CAK complex), the two helicases Xpb/Hay and Xpd, and p34, p44, p52 and p62 (refs 1-3). As the kinase subunit of TFIIH, Cdk7 participates in basal transcription by phosphorylating the carboxy-terminal domain of the largest subunit of RNA polymerase II. As part of CAK, Cdk7 also phosphorylates other Cdks, an essential step for their activation. Here we show that the Drosophila TFIIH component Xpd negatively regulates the cell cycle function of Cdk7, the CAK activity. Excess Xpd titrates CAK activity, resulting in decreased Cdk T-loop phosphorylation, mitotic defects and lethality, whereas a decrease in Xpd results in increased CAK activity and cell proliferation. Moreover, Xpd is downregulated at the beginning of mitosis when Cdk1, a cell cycle target of Cdk7, is most active. Downregulation of Xpd thus seems to contribute to the upregulation of mitotic CAK activity and to regulate mitotic progression positively. Simultaneously, the downregulation of Xpd might be a major mechanism of mitotic silencing of basal transcription.