Transcription elongation rates are important for RNA processing, but sequence-specific regulation is poorly understood. We addressed this in vivo, analyzing RNAPI in S.cerevisiae. Analysis of Miller chromatin spreads and mapping RNAPI using UV crosslinking, revealed a marked 5' bias and strikingly uneven local polymerase occupancy, indicating substantial variation in transcription speed. Two features of the nascent transcript correlated with RNAPI distribution; folding energy and G+C-content. In vitro experiments confirmed that strong RNA structures close to the polymerase promote forward translocation and limit backtracking, whereas high G+C within the transcription bubble slows elongation. We developed a mathematical model for RNAPI elongation, which confirmed the importance of nascent RNA folding in transcription. RNAPI from S.pombe was similarly sensitive to transcript folding, as were S.cerevisiae RNAPII and RNAPIII. For RNAPII, unstructured RNA, which favors slowed elongation, was associated with faster cotranscriptional splicing and proximal splice site usage indicating regulatory significance for transcript folding.