The general transcription factor P-TEFb stimulates RNA polymerase II elongation and cotranscriptional processing of pre-mRNA. Contributing to a functional equilibrium important for growth control, a reservoir of P-TEFb is maintained in an inactive snRNP where 7SK snRNA is a central scaffold. Here, we identify PIP7S as a La-related protein stably associated with and required for 7SK snRNP integrity. PIP7S binds and stabilizes nearly all the nuclear 7SK via 3' -UUU-OH, leading to the sequestration and inactivation of P-TEFb. This function requires its La domain and intact C terminus. The latter is frequently deleted in human tumors due to microsatellite instability-associated mutations. Consistent with the tumor suppressor role of a Drosophila homolog of PIP7S, loss of PIP7S function shifts the P-TEFb equilibrium toward the active state, disrupts epithelial differentiation, and causes P-TEFb-dependent malignant transformation. Through PIP7S modulation of P-TEFb, our data thus link a general elongation factor to growth control and tumorigenesis.