NELF focuses sites of initiation and maintains promoter architecture.

Many factors control the elongation phase of transcription by RNA polymerase II (Pol II), a process that plays an essential role in regulating gene expression. We utilized cells expressing degradation tagged subunits of NELFB, PAF1 and RTF1 to probe the effects of depletion of the factors on nascent transcripts using PRO-Seq and on chromatin architecture using DFF-ChIP. Although NELF is involved in promoter proximal pausing, depletion of NELFB had only a minimal effect on the level of paused transcripts and almost no effect on control of productive elongation. Instead, NELF depletion increased the utilization of downstream transcription start sites and caused a dramatic, genome-wide loss of H3K4me3 marked nucleosomes. Depletion of PAF1 and RTF1 both had major effects on productive transcript elongation in gene bodies and also caused initiation site changes like those seen with NELFB depletion. Our study confirmed that the first nucleosome encountered during initiation and early elongation is highly positioned with respect to the major TSS. In contrast, the positions of H3K4me3 marked nucleosomes in promoter regions are heterogeneous and are influenced by transcription. We propose a model defining NELF function and a general role of the H3K4me3 modification in blocking transcription initiation.

DHODH inhibition enhances the efficacy of immune checkpoint blockade by increasing cancer cell antigen presentation.

Pyrimidine nucleotide biosynthesis is a druggable metabolic dependency of cancer cells, and chemotherapy agents targeting pyrimidine metabolism are the backbone of treatment for many cancers. Dihydroorotate dehydrogenase (DHODH) is an essential enzyme in the de novo pyrimidine biosynthesis pathway that can be targeted by clinically approved inhibitors. However, despite robust preclinical anticancer efficacy, DHODH inhibitors have shown limited single-agent activity in phase 1 and 2 clinical trials. Therefore, novel combination therapy strategies are necessary to realize the potential of these drugs. To search for therapeutic vulnerabilities induced by DHODH inhibition, we examined gene expression changes in cancer cells treated with the potent and selective DHODH inhibitor brequinar (BQ). This revealed that BQ treatment causes upregulation of antigen presentation pathway genes and cell surface MHC class I expression. Mechanistic studies showed that this effect is 1) strictly dependent on pyrimidine nucleotide depletion, 2) independent of canonical antigen presentation pathway transcriptional regulators, and 3) mediated by RNA polymerase II elongation control by positive transcription elongation factor B (P-TEFb). Furthermore, BQ showed impressive single-agent efficacy in the immunocompetent B16F10 melanoma model, and combination treatment with BQ and dual immune checkpoint blockade (anti-CTLA-4 plus anti-PD-1) significantly prolonged mouse survival compared to either therapy alone. Our results have important implications for the clinical development of DHODH inhibitors and provide a rationale for combination therapy with BQ and immune checkpoint blockade.

IDR-targeting compounds suppress HPV genome replication via disruption of phospho-BRD4 association with DNA damage response factors.

Compounds binding to the bromodomains of bromodomain and extra-terminal (BET) family proteins, particularly BRD4, are promising anticancer agents. Nevertheless, side effects and drug resistance pose significant obstacles in BET-based therapeutics development. Using high-throughput screening of a 200,000-compound library, we identified small molecules targeting a phosphorylated intrinsically disordered region (IDR) of BRD4 that inhibit phospho-BRD4 (pBRD4)-dependent human papillomavirus (HPV) genome replication in HPV-containing keratinocytes. Proteomic profiling identified two DNA damage response factors-53BP1 and BARD1-crucial for differentiation-associated HPV genome amplification. pBRD4-mediated recruitment of 53BP1 and BARD1 to the HPV origin of replication occurs in a spatiotemporal and BRD4 long (BRD4-L) and short (BRD4-S) isoform-specific manner. This recruitment is disrupted by phospho-IDR-targeting compounds with little perturbation of the global transcriptome and BRD4 chromatin landscape. The discovery of these protein-protein interaction inhibitors (PPIi) not only demonstrates the feasibility of developing PPIi against phospho-IDRs but also uncovers antiviral agents targeting an epigenetic regulator essential for virus-host interaction and cancer development.

Sirtuin 6 is required for the integrated stress response and resistance to inhibition of transcriptional cyclin-dependent kinases.

Pancreatic ductal adenocarcinoma (PDAC) is classified into two key subtypes, classical and basal, with basal PDAC predicting worse survival. Using in vitro drug assays, genetic manipulation experiments, and in vivo drug studies in human patient-derived xenografts (PDXs) of PDAC, we found that basal PDACs were uniquely sensitive to transcriptional inhibition by targeting cyclin-dependent kinase 7 (CDK7) and CDK9, and this sensitivity was recapitulated in the basal subtype of breast cancer. We showed in cell lines, PDXs, and publicly available patient datasets that basal PDAC was characterized by inactivation of the integrated stress response (ISR), which leads to a higher rate of global mRNA translation. Moreover, we identified the histone deacetylase sirtuin 6 (SIRT6) as a critical regulator of a constitutively active ISR. Using expression analysis, polysome sequencing, immunofluorescence, and cycloheximide chase experiments, we found that SIRT6 regulated protein stability by binding activating transcription factor 4 (ATF4) in nuclear speckles and protecting it from proteasomal degradation. In human PDAC cell lines and organoids as well as in murine PDAC genetically engineered mouse models where SIRT6 was deleted or down-regulated, we demonstrated that SIRT6 loss both defined the basal PDAC subtype and led to reduced ATF4 protein stability and a nonfunctional ISR, causing a marked vulnerability to CDK7 and CDK9 inhibitors. Thus, we have uncovered an important mechanism regulating a stress-induced transcriptional program that may be exploited with targeted therapies in particularly aggressive PDAC.

Dynamic regulation of P-TEFb by 7SK snRNP is integral to the DNA damage response to regulate chemotherapy sensitivity.

Testicular germ cell tumors and closely related embryonal stem cells are exquisitely sensitive to cisplatin, a feature thought to be linked to their pluripotent state and p53 status. It remains unclear whether and how cellular state is coordinated with p53 to confer cisplatin sensitivity. Here, we report that positive transcription elongation factor b (P-TEFb) determines cell fate upon DNA damage. We find that cisplatin rapidly activates P-TEFb by releasing it from inhibitory 7SK small nuclear ribonucleoprotein complex. P-TEFb directly phosphorylates pluripotency factor estrogen-related receptor beta (ESRRB), and induces its proteasomal degradation to enhance pro-survival glycolysis. On the other hand, P-TEFb is required for the transcription of a substantial portion of p53 target genes, triggering cell death during prolonged cisplatin treatment. These results reveal previously underappreciated roles of P-TEFb to coordinate the DNA damage response. We discuss the implications for using P-TEFb inhibitors to treat cancer and ameliorate cisplatin-induced ototoxicity.

Differential dependencies of human RNA polymerase II promoters on TBP, TAF1, TFIIB and XPB.

The effects of rapid acute depletion of components of RNA polymerase II (Pol II) general transcription factors (GTFs) that are thought to be critical for formation of preinitiation complexes (PICs) and initiation in vitro were quantified in HAP1 cells using precision nuclear run-on sequencing (PRO-Seq). The average dependencies for each factor across >70 000 promoters varied widely even though levels of depletions were similar. Some of the effects could be attributed to the presence or absence of core promoter elements such as the upstream TBP-specificity motif or downstream G-rich sequences, but some dependencies anti-correlated with such sequences. While depletion of TBP had a large effect on most Pol III promoters only a small fraction of Pol II promoters were similarly affected. TFIIB depletion had the largest general effect on Pol II and also correlated with apparent termination defects downstream of genes. Our results demonstrate that promoter activity is combinatorially influenced by recruitment of TFIID and sequence-specific transcription factors. They also suggest that interaction of the preinitiation complex (PIC) with nucleosomes can affect activity and that recruitment of TFIID containing TBP only plays a positive role at a subset of promoters.

Human Cytomegalovirus IE2 Both Activates and Represses Initiation and Modulates Elongation in a Context-Dependent Manner.

Human cytomegalovirus (HCMV) immediate-early 2 (IE2) protein is a multifunctional transcription factor that is essential for lytic HCMV infection. IE2 functions as an activator of viral early genes, negatively regulates its own promoter, and is required for viral replication. The mechanisms by which IE2 executes these distinct functions are incompletely understood. Using PRO-Seq, which profiles nascent transcripts, and a recently developed DFF-chromatin immunoprecipitation (DFF-ChIP; employs chromatin digestion by the endonuclease DNA fragmentation factor prior to IP) approach that resolves occupancy and local chromatin environment, we show that IE2 controls viral gene transcription in three distinct capacities during late HCMV infection and reveal mechanisms that involve direct binding of IE2 to viral DNA. IE2 represses a subset of viral promoters by binding within their core promoter regions and blocking the assembly of preinitiation complexes (PICs). Remarkably, IE2 forms a repressive complex at the major immediate-early promoter region involving direct association of IE2 with nucleosomes and TBP. IE2 stimulates transcription by binding nearby, but not within, core promoter regions. In addition, IE2 functions as a direct roadblock to transcription elongation. At one locus, this function of IE2 appears to be important for the synthesis of a spliced viral RNA. Consistent with the minimal observed effects of IE2 depletion on host gene transcription, IE2 does not functionally engage the host genome. Our results reveal mechanisms of transcriptional control by IE2, uncover a previously unknown function of IE2 as a Pol II elongation modulator, and demonstrate that DFF-ChIP is a useful tool for probing transcription factor occupancy and interactions between transcription factors and nucleosomes at high resolution. IMPORTANCE HCMV infects more than half of the world population and persists lifelong in its hosts. Although generally asymptomatic, HCMV infection can lead to life-threating disease in immunosuppressed individuals. Moreover, HCMV is the leading infectious cause of birth defects in the United States. As there are no vaccines effective against HCMV and antiviral drugs exhibit toxicity and are undermined by resistant HCMV variants, other vulnerabilities in HCMV must be explored. Here, we characterize the mechanism by which IE2 controls transcription during late HCMV infection. We demonstrate that IE2 engages numerous consensus sites across the HCMV genome and functions as an activator, repressor, or elongation modulator depending on the context of IE2 binding sites in relation to Pol II initiation and elongation complexes. Our findings have important implications for the ongoing exploration of IE2 as an antiviral drug target.

Human Cytomegalovirus Infection Elicits Global Changes in Host Transcription by RNA Polymerases I, II, and III.

How human cytomegalovirus (HCMV) infection impacts the transcription of the host genome remains incompletely understood. Here, we examine the global consequences of infection of primary human foreskin fibroblasts (HFFs) on transcription by RNA polymerase I, II, and III over the course of a lytic infection using PRO-Seq. The expected rapid induction of innate immune response genes is observed with specific subsets of genes exhibiting dissimilar expression kinetics. We find minimal effects on Pol II initiation, but increased rates of the release of paused Pol II into productive elongation are detected by 24 h postinfection and pronounced at late times postinfection. Pol I transcription increases during infection and we provide evidence for a potential Pol I elongation control mechanism. Pol III transcription of tRNA genes is dramatically altered, with many induced and some repressed. All effects are partially dependent on viral genome replication, suggesting a link to viral mRNA levels and/or a viral early-late or late gene product. Changes in tRNA transcription are connected to distinct alterations in the chromatin state around tRNA genes, which were probed with high-resolution DFF-ChIP. Additionally, evidence is provided that the Pol III PIC stably contacts an upstream -1 nucleosome. Finally, we compared and contrasted our HCMV data with results from published experiments with HSV-1, EBV, KSHV, and MHV68. We report disparate effects on Pol II transcription and potentially similar effects on Pol III transcription.

Differences in RNA polymerase II complexes and their interactions with surrounding chromatin on human and cytomegalovirus genomes.

Interactions of the RNA polymerase II (Pol II) preinitiation complex (PIC) and paused early elongation complexes with the first downstream (+1) nucleosome are thought to be functionally important. However, current methods are limited for investigating these relationships, both for cellular chromatin and the human cytomegalovirus (HCMV) genome. Digestion with human DNA fragmentation factor (DFF) before immunoprecipitation (DFF-ChIP) precisely revealed both similarities and major differences in PICs driven by TBP on the host genome in comparison with PICs driven by TBP or the viral-specific, late initiation factor UL87 on the viral genome. Host PICs and paused Pol II complexes are frequently found in contact with the +1 nucleosome and paused Pol II can also be found in a complex involved in the initial invasion of the +1 nucleosome. In contrast, viral transcription complexes have very limited nucleosomal interactions, reflecting a relative lack of chromatinization of transcriptionally active regions of HCMV genomes.

Nuclear export restricts Gdown1 to a mitotic function.

Approximately half of purified mammalian RNA polymerase II (Pol II) is associated with a tightly interacting sub-stoichiometric subunit, Gdown1. Previous studies have established that Gdown1 inhibits transcription initiation through competitive interactions with general transcription factors and blocks the Pol II termination activity of transcription termination factor 2 (TTF2). However, the biological functions of Gdown1 remain poorly understood. Here, we utilized genetic, microscopic, and multi-omics approaches to functionally characterize Gdown1 in three human cell lines. Acute depletion of Gdown1 caused minimal direct effects on transcription. We show that Gdown1 resides predominantly in the cytoplasm of interphase cells, shuttles between the cytoplasm and nucleus, and is regulated by nuclear export. Gdown1 enters the nucleus at the onset of mitosis. Consistently, genetic ablation of Gdown1 is associated with partial de-repression of mitotic transcription, and Gdown1 KO cells present with evidence of aberrant mitoses coupled to p53 pathway activation. Evidence is presented demonstrating that Gdown1 modulates the combined functions of purified productive elongation factors PAF1C, RTF1, SPT6, DSIF and P-TEFb in vitro. Collectively, our findings support a model wherein the Pol II-regulatory function of Gdown1 occurs during mitosis and is required for genome integrity.

MYC assembles and stimulates topoisomerases 1 and 2 in a "topoisome".

High-intensity transcription and replication supercoil DNA to levels that can impede or halt these processes. As a potent transcription amplifier and replication accelerator, the proto-oncogene MYC must manage this interfering torsional stress. By comparing gene expression with the recruitment of topoisomerases and MYC to promoters, we surmised a direct association of MYC with topoisomerase 1 (TOP1) and TOP2 that was confirmed in vitro and in cells. Beyond recruiting topoisomerases, MYC directly stimulates their activities. We identify a MYC-nucleated "topoisome" complex that unites TOP1 and TOP2 and increases their levels and activities at promoters, gene bodies, and enhancers. Whether TOP2A or TOP2B is included in the topoisome is dictated by the presence of MYC versus MYCN, respectively. Thus, in vitro and in cells, MYC assembles tools that simplify DNA topology and promote genome function under high output conditions.

An alternative D. melanogaster 7SK snRNP.

BACKGROUND: The 7SK small nuclear RNA (snRNA) found in most metazoans is a key regulator of P-TEFb which in turn regulates RNA polymerase II elongation. Although its primary sequence varies in protostomes, its secondary structure and function are conserved across evolutionary distant taxa. RESULTS: Here, we describe a novel ncRNA sharing many features characteristic of 7SK RNAs, in D. melanogaster. We examined the structure of the corresponding gene and determined the expression profiles of the encoded RNA, called snRNA:7SK:94F, during development. It is probably produced from the transcription of a lncRNA which is processed into a mature snRNA. We also addressed its biological function and we show that, like dm7SK, this alternative 7SK interacts in vivo with the different partners of the P-TEFb complex, i.e. HEXIM, LARP7 and Cyclin T. This novel RNA is widely expressed across tissues. CONCLUSION: We propose that two distinct 7SK genes might contribute to the formation of the 7SK snRNP complex in D. melanogaster.

Cytomegalovirus late transcription factor target sequence diversity orchestrates viral early to late transcription.

Beta- and gammaherpesviruses late transcription factors (LTFs) target viral promoters containing a TATT sequence to drive transcription after viral DNA replication has begun. Human cytomegalovirus (HCMV), a betaherpesvirus, uses the UL87 LTF to bind both TATT and host RNA polymerase II (Pol II), whereas the UL79 LTF has been suggested to drive productive elongation. Here we apply integrated functional genomics (dTag system, PRO-Seq, ChIP-Seq, and promoter function assays) to uncover the contribution of diversity in LTF target sequences in determining degree and scope to which LTFs drive viral transcription. We characterize the DNA sequence patterns in LTF-responsive and -unresponsive promoter populations, determine where and when Pol II initiates transcription, identify sites of LTF binding genome-wide, and quantify change in nascent transcripts from individual promoters in relation to core promoter sequences, LTF loss, stage of infection, and viral DNA replication. We find that HCMV UL79 and UL87 LTFs function concordantly to initiate transcription from over half of all active viral promoters in late infection, while not appreciably affecting host transcription. Both LTFs act on and bind to viral early-late and late kinetic-class promoters. Over one-third of these core promoters lack the TATT and instead have a TATAT, TGTT, or YRYT. The TATT and non-TATT motifs are part of a sequence block with a sequence code that correlates with promoter transcription level. LTF occupancy of a TATATA palindrome shared by back-to-back promoters is linked to bidirectional transcription. We conclude that diversity in LTF target sequences shapes the LTF-transformative program that drives the viral early-to-late transcription switch.

A unified view of the sequence and functional organization of the human RNA polymerase II promoter.

To better understand human RNA polymerase II (Pol II) promoters in the context of promoter-proximal pausing and local chromatin organization, 5' and 3' ends of nascent capped transcripts and the locations of nearby nucleosomes were accurately identified through sequencing at exceptional depth. High-quality visualization tools revealed a preferred sequence that defines over 177 000 core promoters with strengths varying by >10 000-fold. This sequence signature encompasses and better defines the binding site for TFIID and is surprisingly invariant over a wide range of promoter strength. We identified a sequence motif associated with promoter-proximal pausing and demonstrated that cap methylation only begins once transcripts are about 30 nt long. Mapping also revealed a ∼150 bp periodic downstream sequence element (PDE) following the typical pause location, strongly suggestive of a +1 nucleosome positioning element. A nuclear run-off assay utilizing the unique properties of the DNA fragmentation factor (DFF) coupled with sequencing of DFF protected fragments demonstrated that a +1 nucleosome is present downstream of paused Pol II. Our data more clearly define the human Pol II promoter: a TFIID binding site with built-in downstream information directing ubiquitous promoter-proximal pausing and downstream nucleosome location.

Human cytomegalovirus IE2 drives transcription initiation from a select subset of late infection viral promoters by host RNA polymerase II.

Herpesvirus late promoters activate gene expression after viral DNA synthesis has begun. Alphaherpesviruses utilize a viral immediate-early protein to do this, whereas beta- and gammaherpesviruses primarily use a 6-member set of viral late-acting transcription factors (LTF) that are drawn to a TATT sequence in the late promoter. The betaherpesvirus, human cytomegalovirus (HCMV), produces three immediate-early 2 protein isoforms, IE2-86, IE2-60, IE2-40, late in infection, but whether they activate late viral promoters is unknown. Here, we quickly degrade the IE2 proteins in late infection using dTag methodology and analyze effects on transcription using customized PRO-Seq and computational methods combined with multiple validation methods. We discover that the IE2 proteins selectively drive RNA Pol II transcription initiation at a subset of viral early-late and late promoters common to different HCMV strains, but do not substantially affect Pol II transcription of the 9,942 expressed host genes. Most of the IE2-activated viral late infection promoters lack the TATT sequence bound by the HCMV UL87-encoded LTF. The HCMV TATT-binding protein is not mechanistically involved in late RNA expression from the IE2-activated TATT-less UL83 (pp65) promoter, as it is for the TATT-containing UL82 (pp71) promoter. While antecedent viral DNA synthesis is necessary for transcription from the late infection viral promoters, continued viral DNA synthesis is unnecessary. We conclude that in late infection the IE2 proteins target a distinct subset of HCMV early-late and late promoters for transcription initiation by RNA Pol II. Commencement of viral DNA replication renders the HCMV genome late promoters susceptible to late-acting viral transcription factors.

Functional interaction of human Ssu72 with RNA polymerase II complexes.

Phosphorylation of the C-terminal domain (CTD) of the large subunit of human RNA polymerase II (Pol II) is regulated during the transcription cycle by the combined action of specific kinases and phosphatases. Pol II enters into the preinitiation complex (PIC) unphosphorylated, but is quickly phosphorylated by Cdk7 during initiation. How phosphatases alter the pattern and extent of CTD phosphorylation at this early stage of transcription is not clear. We previously demonstrated the functional association of an early-acting, magnesium-independent phosphatase with early elongation complexes. Here we show that Ssu72 is responsible for that activity. We found that the phosphatase enters the transcription cycle during the formation of PICs and that Ssu72 is physically associated with very early elongation complexes. The association of Ssu72 with elongation complexes was stable to extensive washing with up to 200 mM KCl. Interestingly, Ssu72 ceased to function on complexes that contained RNA longer than 28 nt. However, when PICs were washed before initiation, the strict cutoff at 28 nt was lost. This suggests that factor(s) are important for the specific regulation of Ssu72 function during the transition between initiation and pausing. Overall, our results demonstrate when Ssu72 can act on early transcription complexes and suggest that Ssu72 may also function in the PIC prior to initiation.

Nucleotide Resolution Comparison of Transcription of Human Cytomegalovirus and Host Genomes Reveals Universal Use of RNA Polymerase II Elongation Control Driven by Dissimilar Core Promoter Elements.

The large genome of human cytomegalovirus (HCMV) is transcribed by RNA polymerase II (Pol II). However, it is not known how closely this betaherpesvirus follows host transcriptional paradigms. We applied PRO-Seq and PRO-Cap methods to profile and quantify transcription initiation and productive elongation across the host and virus genomes in late infection. A major similarity between host transcription and viral transcription is that treatment of cells with the P-TEFb inhibitor flavopiridol preempts virtually all productive elongation, which otherwise covers most of the HCMV genome. The deep, nucleotide resolution identification of transcription start sites (TSSs) enabled an extensive analysis of core promoter elements. An important difference between host and viral transcription is that initiation is much more pervasive on the HCMV genome. The sequence preferences in the initiator region around the TSS and the utilization of upstream T/A-rich elements are different. Upstream TATA positions the TSS and boosts initiation in both the host and the virus, but upstream TATT has a significant stimulatory impact only on the viral template. The major immediate early (MIE) promoter remained active during late infection and was accompanied by transcription of both strands of the MIE enhancer from promoters within the enhancer. Surprisingly, we found that the long noncoding RNA4.9 is intimately associated with the viral origin of replication (oriLyt) and was transcribed to a higher level than any other viral or host promoter. Finally, our results significantly contribute to the idea that late in infection, transcription takes place on viral genomes that are not highly chromatinized.IMPORTANCE Human cytomegalovirus infects more than half of humans, persists silently in virtually all tissues, and produces life-threatening disease in immunocompromised individuals. HCMV is also the most common infectious cause of birth defects and the leading nongenetic cause of sensorineural hearing loss in the United States. Because there is no vaccine and current drugs have problems with potency, toxicity, and antiviral drug resistance, alternative treatment strategies that target different points of viral control are needed. Our current study contributes to this goal by applying newly developed methods to examine transcription of the HCMV and host genomes at nucleotide resolution in an attempt to find targetable differences between the two. After a thorough analysis of productive elongation and of core promoter element usage, we found that some mechanisms of regulating transcription are shared between the host and HCMV but that others are distinctly different. This suggests that HCMV transcription may be a legitimate target for future antiviral therapies and this might translate to other herpesviruses.

Use of the nuclear walk-on methodology to determine sites of RNA polymerase II initiation and pausing and quantify nascent RNAs in cells.

Transcription by RNA polymerase II (Pol II) is controlled during initiation, elongation, and termination by a large variety of transcription factors, the state of chromatin modifications, and environmental conditions. Herein we describe experimental approaches for the examination of Pol II transcription at semi-global and genome-wide scales through analysis of nascent Pol II transcripts. We begin with a description of the nuclear walk-on (NWO) assay, which involves rapid isolation of nuclei in the presence of EDTA, followed by extension of about a quarter of the nascent transcripts with 32P-CTP. Labeled nascent transcripts are then analyzed by denaturing PAGE and phosphorimaging followed by densitometry analysis to quantify the signal on the gel. A parallel reaction containing α-amanitin to inhibit Pol II reveals transcription due to Pol I and Pol III, which can be subtracted to yield a profile of Pol II transcription. We then describe how to use the NWO as a front end for PRO-Seq and PRO-Cap methods, which permit the genome-wide characterization of Pol II transcription at nucleotide resolution and provide precise information about sites of transcription initiation and pausing. We discuss strategies for optimizing sequencing methods that capture nascent Pol II transcripts, methods of bias reduction, and approaches for normalizing these and other sequencing datasets using spike-in controls.

Hydrogen peroxide yields mechanistic insights into human mRNA capping enzyme function.

Capping of nascent RNA polymerase II (Pol II) transcripts is required for gene expression and the first two steps are catalyzed by separate 5' triphosphatase and guanylyltransferase activities of the human capping enzyme (HCE). The cap is added co-transcriptionally, but how the two activities are coordinated is unclear. Our previous in vitro work has suggested that an unidentified factor modulates the minimum length at which nascent transcripts can be capped. Using the same well-established in vitro system with hydrogen peroxide as a capping inhibitor, we show that this unidentified factor targets the guanylyltransferase activity of HCE. We also uncover the mechanism of HCE inhibition by hydrogen peroxide, and by using mass spectrometry demonstrate that the active site cysteine residue of the HCE triphosphatase domain becomes oxidized. Using recombinant proteins for the two separated HCE domains, we provide evidence that the triphosphatase normally acts on transcripts shorter than can be acted upon by the guanylyltransferase. Our further characterization of the capping reaction dependence on transcript length and its interaction with the unidentified modulator of capping raises the interesting possibility that the capping reaction could be regulated.