Fcp1 dephosphorylates the C-terminal domain of the largest subunit of RNA polymerase II (Pol II) to recycle it into a form that can initiate a new round of transcription. Previously, we identified Drosophila Fcp1 as an important factor in optimal Hsp70 mRNA accumulation after heat shock. Here, we examine the role of Fcp1 in transcription of heat shock genes in vivo. We demonstrate that Fcp1 localizes to active sites of transcription including the induced Hsp70 gene. The reduced Hsp70 mRNA accumulation seen by RNA interference (RNAi) depletion of Fcp1 in S2 cells is a result of a loss of Pol II in the coding region of highly transcribed heat shock-induced genes: Hsp70, Hsp26, and Hsp83. Moreover, Fcp1 depletion dramatically increases phosphorylation of the non-chromatin-bound Pol II. Reexpression of either wild-type or catalytically dead versions of Fcp1 demonstrates that both the reduced Pol II levels on heat shock genes and the increased levels of phosphorylated free Pol II are dependent on the catalytic activity of Fcp1. Our results indicate that Fcp1 is required to maintain the pool of initiation-competent unphosphorylated Pol II, and this function is particularly important for the highly transcribed heat shock genes.