The transcription of eukaryotic protein-coding genes involves complex regulation of RNA polymerase (Pol) II activity in response to physiological conditions and developmental cues. One element of this regulation involves phosphorylation of the carboxy-terminal domain (CTD) of the largest polymerase subunit by a transcription elongation factor, P-TEFb, which comprises the kinase CDK9 and cyclin T1 or T2 (ref. 1). Here we report that in human HeLa cells more than half of the P-TEFb is sequestered in larger complexes that also contain 7SK RNA, an abundant, small nuclear RNA (snRNA) of hitherto unknown function. P-TEFb and 7SK associate in a specific and reversible manner. In contrast to the smaller P-TEFb complexes, which have a high kinase activity, the larger 7SK/P-TEFb complexes show very weak kinase activity. Inhibition of cellular transcription by chemical agents or ultraviolet irradiation trigger the complete disruption of the P-TEFb/7SK complex, and enhance CDK9 activity. The transcription-dependent interaction of P-TEFb with 7SK may therefore contribute to an important feedback loop modulating the activity of RNA Pol II.