The C-terminal domain (CTD) of the largest subunit of yeast RNA polymerase II contains 26-27 tandem copies of a conserved heptapeptide of unknown function. Yeast strains whose CTD contains ten heptamers are viable but defective for transcription of the INO1 gene and cold sensitive for growth. Deletion of the SIN1 gene, which codes for a DNA-binding protein that negatively regulates HO transcription, restores INO1 transcription and reduces the cold sensitivity of such strains. A SIN1 deletion suppresses the lethality of a CTD with nine heptamer repeats but not with seven repeats. These observations indicate a functional relationship between SIN1 and the CTD: the CTD might remove SIN1 from DNA, or removal of SIN1 may be a prerequisite for function of the CTD. The SWI1, SWI2, and SWI3 genes, whose products activate HO transcription by antagonizing SIN1, are also required for INO1 transcription and may assist the CTD. In addition, an intact CTD binds nonspecifically to DNA in vitro.