The phosphorylation states of the C‐terminal domain of RNA polymerase II (CTD) coordinate eukaryotic transcription by recruiting protein regulators to Pol II. The precise placement and removal of phosphate groups on the specific residues of the heptad repeat of CTD is critical for the fidelity and effectiveness of transcription. In spite of highly similar flanking residues, Ser5 dephosphorylation is carried out efficiently during transcription elongation when Ser2 phosphorylation accumulates, while Ser2 dephosphorylation occurs predominantly at the end of transcription. To understand the molecular mechanisms of how the CTD phosphatases Ssu72 and Fcp1 specifically remove CTD phosphorylation marks in the context of other phosphorylated CTD residues, we used a combination of high resolution MALDI‐TOF mass spectrometry, X‐ray crystallography, and protein engineering to analyze CTD phosphoregulation. Biochemical and bioanalytical characterization revealed that Ssu72 dephosphorylates Ser5 effectively but with much less activity towards Ser7 and Ser2 and no activity against Tyr1 and Thr4. Structural analysis demonstrated that the requirement for cis‐proline substrates of Ssu72 inhibits binding of bulky flanking residues like Tyr1 next to Ser2, which illustrates why Ser5 is the preferred substrate for Ssu72. Phosphorylation of Tyr1 even further prohibits binding of pSer2 by Ssu72, preventing the untimely dephosphorylation of Ser2 at elongation by Ssu72. Finally, we show that Fcp1 not only dephosphorylates phosphorylated Ser2 and Ser5 but also phosphorylated Tyr1. General clearance of phosphorylation marks on the CTD by Fcp1 supports its reported role in recycling Pol II for the next round of transcription. Our results reveal novel roles for Tyr1 in preventing inappropriate dephosphorylation of Ser2 by Ssu72 during transcriptional elongation and for Fcp1 in removing Tyr1 phosphorylation marks at the end of transcription.This abstract is from the Experimental Biology 2019 Meeting. There is no full text article associated with this abstract published in The FASEB Journal.