Transcription elongation regulates c-fos expression in mouse and human cells. In the inactive state of the gene, RNA polymerases are engaged only in the promoter-proximal region. Upon activation, RNA polymerases move efficiently along the complete gene. We have used Epstein-Barr virus (EBV) episomes as a gene transfer system to study the role of promoter-proximal pausing and transcript elongation in c-fos expression. We find that the sequence located immediately downstream of the transcriptional start site specifies pausing of RNA polymerases, dependent on both its orientation and position relative to the promoter. This sequence is, however, not necessary to maintain repression in the absence of a stimulus. As promoter-proximal pausing is therefore not a repression mechanism for the c-fos gene, the promoter and enhancer sequences are the main determinants of RNA polymerase elongation competence. Surprisingly, we find that promoter-proximal pausing further increases transcriptional levels from a variety of promoters. These observations lead us to hypothesize that promoter-proximal pausing of RNA polymerase II augments c-fos expression by allowing more efficient phosphorylation of the C-terminal domain of the large subunit.