Cryptic unstable transcripts (CUTs) are short, 300-600-nucleotide (nt) RNA 
polymerase II transcripts that are rapidly degraded by the nuclear RNA exosome 
in yeast. CUTs are widespread and probably represent the largest share of hidden 
transcription in the yeast genome. Similarly to small nucleolar and small 
nuclear RNAs, transcription of CUT-encoding genes is terminated by the Nrd1 
complex pathway. We show here that this termination mode and ensuing CUTs 
degradation crucially depend on the position of RNA polymerase II relative to 
the transcription start site. Notably, position sensing correlates with the 
phosphorylation status of the polymerase C-terminal domain (CTD). The Nrd1 
complex is recruited to chromatin via interactions with both the nascent RNA and 
the CTD, but a permissive phosphorylation status of the latter is absolutely 
required for efficient transcription termination. We discuss the mechanism 
underlying the regulation of coexisting cryptic and mRNA-productive 
transcription.