Like that of many protein-coding genes, expression of the p21(CIP1) cell cycle 
inhibitor is regulated at the level of transcription elongation. While many 
transcriptional activators have been shown to stimulate elongation, the 
mechanisms by which promoter-specific repressors regulate pausing and elongation 
by RNA polymerase II (RNA PolII) are not well described. Here we report that the 
transcription factor Sp3 inhibits basal p21(CIP1) gene expression by 
promoter-bound RNA PolII. Knockdown of Sp3 led to increased p21(CIP1) mRNA 
levels and reduced occupancy of the negative elongation factor (NELF) at the 
p21(CIP1) promoter, although the level of binding of the positive transcription 
elongation factor b (P-TEFb) kinase was not increased. Sp3 depletion correlated 
with increased H3K36me3 and H2Bub1, two histone modifications associated with 
transcription elongation. Further, Sp3 was shown to promote the binding of 
protein phosphatase 1 (PP1) to the p21(CIP1) promoter, leading to reduced H3S10 
phosphorylation, a finding consistent with Sp3-dependent regulation of the local 
balance between kinase and phosphatase activities. Analysis of other targets of 
Sp3-mediated repression suggests that, in addition to previously described SUMO 
modification-dependent chromatin-silencing mechanisms, inhibition of the 
transition of paused RNA PolII to productive elongation, described here for 
p21(CIP1), is a general mechanism by which transcription factor Sp3 fine-tunes 
gene expression.