Promoter proximal pausing of RNA polymerase II (Pol II) is a critical transcriptional regulatory mechanism in metazoans that requires the transcription factor DRB sensitivity-inducing factor (DSIF) and the inhibitory negative elongation factor (NELF). DSIF, composed of Spt4 and Spt5, establishes the pause by recruiting NELF to the elongation complex. However, the role of DSIF in pausing beyond NELF recruitment remains unclear. We used a highly purified invitro system and Drosophila nuclear extract to investigate the role of DSIF in promoter proximal pausing. We identified two domains of Spt5, the KOW4 and NGN domains, that facilitate Pol II pausing. The KOW4 domain promotes pausing through its interaction with the nascent RNA while the NGN domain does so through a short helical motif that is in close proximity to the non-transcribed DNA template strand. Removal of this sequence in Drosophila has a male-specific dominant negative effect. The alpha-helical motif is also needed to support fly viability. We also show that the interaction between the Spt5 KOW1 domain and the upstream DNA helix is required for DSIF association with the Pol II elongation complex. Disruption of the KOW1-DNA interaction is dominant lethal invivo. Finally, we show that the KOW2-3 domain of Spt5 mediates the recruitment of NELF to the elongation complex. In summary, our results reveal additional roles for DSIF in transcription regulation and identify specific domains important for facilitating Pol II pausing.