PAF is a five-subunit protein complex composed of Paf1, Cdc73, Leo1, Rtf1 and Ctr9, which was purified from yeast in association with RNA polymerase II and which is believed to function in transcription elongation. However, no direct proof exists for this yet. To assay whether PAF is required in elongation, we determined the in vitro transcription-elongation efficiencies of mutant cell extracts using a DNA template containing two G-less cassettes. paf1Delta or cdc73Delta cell extracts showed reduced transcription-elongation efficiencies (16-18% of the wild-type levels), whereas leo1Delta and rtf1Delta showed wild-type levels. In vivo transcription efficiency was diminished in the four mutants analysed, as determined by their abilities to transcribe lacZ. Our work provides molecular evidence that PAF has a positive role in transcription elongation and is composed of at least two functionally different types of subunits (Paf1-Cdc73 and Leo1-Rtf1).