Phosphorylation of the C-terminal domain (CTD) of RNA polymerase II (RNAP II) is a dynamic process that regulates transcription and coordinates it with pre-mRNA processing. We show here that Rct1, a nuclear multidomain cyclophilin from Schizosaccharomyces pombe, is encoded by an essential gene that interacts with the CTD and regulates its phosphorylation in vivo. Downregulation of Rct1 levels results in increased phosphorylation of the CTD at both Ser2 and Ser5 and in a commensurate decrease in RNAP II transcription. In contrast, overexpression of Rct1 decreases phosphorylation on both sites. The close association of Rct1 with transcriptionally active chromatin suggests a role in regulation of RNAP II transcriptional activity. These data, together with the pleiotropic phenotype upon Rct1 deregulation, suggest that this multidomain cyclophilin is an important player in maintaining the correct phosphorylation code of the CTD and thereby regulating CTD function.