The yeast Paf1 complex (Paf1C: Paf1, Cdc73, Ctr9, Rtf1, and Leo1) is associated with RNA Polymerase II (Pol II) at promoters and coding regions of transcriptionally active genes, but transcript abundance for only a small subset of genes is altered by loss of Paf1. By using conditional and null alleles of PAF1 and microarrays, we determined the identity of both primary and secondary targets of the Paf1C. Neither primary nor secondary Paf1C target promoters were responsive to loss of Paf1. Instead, Paf1 loss altered poly(A) site utilization of primary target genes SDA1 and MAK21, resulting in increased abundance of 3'-extended mRNAs. The 3'-extended MAK21 RNA is sensitive to nonsense-mediated decay (NMD), as revealed by its increased abundance in the absence of Upf1. Therefore, although the Paf1C is associated with Pol II at initiation and during elongation, these critical Paf1-dependent changes in transcript abundance are due to alterations in posttranscriptional processing.