The C-terminal domain (CTD) of Rpb1, the largest subunit of RNA polymerase II, acts as a binding platform for various mRNA processing and histone-modifying enzymes that act co-transcriptionally. These factors are targeted to specific phosphorylation states of the CTD that predominate at different stages of transcription. Within the repeating sequence YSPTSPS, serines 2 and 5 are major phosphorylation sites, but serine 7 phosphorylation was recently discovered in mammalian cells. Here we show that CTD serine 7 is also phosphorylated in yeast and that Ser-7(P) chromatin immunoprecipitation patterns resemble those of Ser-5(P). The basal factor TFIIH can phosphorylate Ser-7 in vitro and is necessary for Ser-7(P) in vivo. Interestingly, deletion of the CTD Ser-5(P) phosphatase Rtr1 leads to an increase in Ser-5(P) but not Ser-7(P).