Phosphorylation of the heptapeptide repeats in the C-terminal domain (CTD) of the largest subunit of RNA polymerase II has been widely proposed as an essential step in transcription initiation on the basis of findings indicating (1) that the CTDs of RNA polymerase II molecules actively engaged in transcription are highly phosphorylated; (2) that polymerase molecules containing non-phosphorylated CTDs preferentially enter the preinitiation complex where they are subsequently phosphorylated; and (3) that essential initiation factors b from yeast, delta from rat, and BTF2(TFIIH) from human cells have closely associated CTD-kinase activities. Here we take advantage of a highly purified enzyme system which supports both CTD phosphorylation and basal transcription to test this hypothesis directly. Using the isoquinoline sulphonamide derivative H-8, which is a potent inhibitor of CTD kinase, we show that basal transcription occurs in the absence of CTD phosphorylation.