Two cyclin-dependent kinases have been identified in yeast and mammalian RNA polymerase II transcription initiation complexes. We find that the two yeast kinases are indistinguishable in their ability to phosphorylate the RNA polymerase II CTD, and yet in living cells one kinase is a positive regulator and the other a negative regulator. This paradox is resolved by the observation that the negative regulator, Srb10, is uniquely capable of phosphorylating the CTD prior to formation of the initiation complex on promoter DNA, with consequent inhibition of transcription. In contrast, the TFIIH kinase phosphorylates the CTD only after the transcription apparatus is associated with promoter DNA. These results reveal that the timing of CTD phosphorylation can account for the positive and negative functions of the two kinases and provide a model for Srb10-dependent repression of genes involved in cell type specificity, meiosis, and sugar utilization.