The eukaryotic transcription factor TFIIS enhances elongation and nascent transcript cleavage activities of RNA polymerase II in a stalled elongation complex. By site-directed mutagenesis, we have demonstrated that invariant residues Asp-261 and Glu-262 of the nucleic acid-binding TFIIS Zn ribbon are critical for stimulation of both elongation and RNA cleavage activities of RNA polymerase II. Substitution of either of these residues inactivates both TFIIS functions, suggesting a related role in both activities. These acidic residues may participate in phosphoryl transfer reactions by a two-metal-ion mechanism in a manner analogous to Klenow fragment. The RNA polymerase II itself may contain a Zn ribbon, in as much as the polymerase's 15-kDa subunit contains a sequence that aligns well with the TFIIS Zn ribbon sequence, including a similarly placed pair of acidic residues.