The general transcription factor TFIIE plays important roles at two distinct but sequential steps in transcription as follows: preinitiation complex formation and activation (open complex formation), and the transition from initiation to elongation. The large subunit of human TFIIE (TFIIEalpha) binds to and facilitates the enzymatic functions of TFIIH, but TFIIE also functions independently from TFIIH. To determine functional roles of the small subunit of human TFIIE (TFIIEbeta), deletion mutations were systematically introduced into putative structural motifs and characteristic sequences. Here we show that all of these structures that lie within the central 227-amino acid region of TFIIEbeta are necessary and sufficient for both basal and activated transcription. We further demonstrate that two C-terminal basic regions are essential for physical interaction with both TFIIEalpha and single-stranded DNA, as well as with other transcription factors including the Drosophila transcriptional regulator Krüppel. In addition, we analyzed the effects of the TFIIEbeta deletion mutations on TFIIH-dependent phosphorylation of the C-terminal domain of RNA polymerase II and on wild type TFIIEbeta-driven basal transcription. Both responsible regions also mapped within the essential 227-amino acid region. Our results suggest that TFIIE engages in communication with both transcription factors and promoter DNA via the TFIIEbeta subunit.