Set1, the yeast histone H3-lysine 4 (H3-K4) methylase, is recruited by the Pol II elongation machinery to a highly localized domain at the 5' portion of active mRNA coding regions. Set1 association depends upon the TFIIH-associated kinase that phosphorylates the Pol II C-terminal domain (CTD) and mediates the transition between initiation and elongation, and Set1 interacts with the form of Pol II whose CTD is phosphorylated at serine 5 but not serine 2. The Rtf1 and Paf1 components of the Pol II-associated Paf1 complex are also important for Set1 recruitment. Although the level of dimethylated H3-K4 is fairly uniform throughout the genome, the pattern of trimethylated H3-K4 strongly correlates with Set1 occupancy. Hypermethylated H3-K4 within the mRNA coding region persists for considerable time after transcriptional inactivation and Set1 dissociation from the chromatin, indicating that H3-K4 hypermethylation provides a molecular memory of recent transcriptional activity.