Small carboxyl-terminal domain (CTD) phosphatase 2 (SCP2) was identified and verified as a protein that interacts with the androgen receptor (AR). Ectopic expression of SCP2 or two other family members, SCP1 and SCP3, attenuated AR transcriptional activity in LNCaP cells and were recruited in an androgen- and AR-dependent fashion onto the prostate-specific antigen (PSA) promoter. Silencing SCP2 and SCP1 by short hairpin RNAs increased androgen-dependent transcription of the PSA gene and augmented AR loading onto the PSA promoter and enhancer. SCP2 also attenuated glucocorticoid receptor (GR) function, and its silencing increased dexamethasone-mediated PSA mRNA accumulation and GR loading onto the PSA enhancer in LNCaP 1F5 cells. SCP2 silencing was accompanied by augmented recruitment and earlier cycling of RNA polymerase II on the promoter. Ser 5 phosphorylation of the RNA polymerase II CTD, a process necessary for initiation of transcription elongation, occurred significantly earlier in SCP2-silenced than parental LNCaP cells. Collectively, our results suggest that SCP2 is involved in promoter clearance during steroid-activated transcription.