Activation of class II gene transcription may involve alleviation of transcription repression as well as stimulation of the assembly and function of the general RNA polymerase (RNAP) II transcription machinery. Here, we investigated whether activator-reversible transcription repression by NC2 (Dr1/DRAP1) contributes to maximum induction levels in unfractionated HeLa nuclear extracts. Surprisingly, we found that depletion of NC2 does not significantly affect basal transcription, but dramatically reduces activated transcription. Immunoblot analyses revealed that the loss of activator function coincides with selective removal of the C-terminal domain (CTD)-hyperphosphorylated RNAP IIO along with NC2. Coimmunoprecipitation experiments with purified factors confirmed that NC2 interacts with RNAP IIO, but not with the unphosphorylated or hypophosphorylated RNAP IIA or CTD-less RNAP IIB forms. Finally, we demonstrate that, in contrast to previously published observations in cell-free systems reconstituted with purified factors, only the CTD-phosphorylated form of RNAP II can mediate activator function in the context of unfractionated HeLa nuclear extracts. These findings reveal an unexpected link between NC2 and transcription activation and suggest that regulation of RNAP II transcription through reversible CTD phosphorylation might be more complex than previously proposed.