RNA polymerase (RNAP) II is subject to extensive phosphorylation on the heptapeptide repeats of the C-terminal domain (CTD) of the largest subunit. An activity that is required for the dephosphorylation of yeast RNAP II in vitro has been purified from a yeast whole cell extract by >30,000-fold. The yeast CTD phosphatase activity copurified with two bands with apparent molecular masses of 100 and 103 kDa. The properties of the yeast CTD phosphatase are similar to those of a previously characterized CTD phosphatase from HeLa cells. These properties include stimulation by the general transcription factor IIF (TFIIF), competitive inhibition by RNAP II, magnesium dependence, and resistance to okadaic acid. Both the HeLa and yeast CTD phosphatases are highly specific for their cognate polymerases. Neither phosphatase functions upon the polymerase molecule from the other species, even though the heptapeptide repeats of the CTDs in yeast RNAP II and mammalian RNAP II are essentially identical. The activity of the highly purified CTD phosphatase is stimulated >300-fold by a partially purified fraction of TFIIF. Recombinant TFIIF did not substitute for the TFIIF fraction, indicating that an additional factor present in the TFIIF fraction is required for CTD phosphatase activity. These results show that yeast contains a CTD phosphatase activity similar to that of mammalian cells that is likely composed of at least two components, one of which is 100 and/or 103 kDa.