Rat pheochromocytoma (PC12) cells were stably transfected with either wild type or mutated human von Hippel-Lindau tumor suppressor protein (hpVHL). These proteins have opposing effects on regulating expression of the gene encoding tyrosine hydroxylase (TH), the rate-limiting enzyme in catecholamine synthesis. Whereas wild type hpVHL represses levels of TH mRNA and protein 5-fold, a truncated pVHL mutant, pVHL(1-115), induces accumulation of TH mRNA and protein 3-fold. hpVHL-induced inhibition of TH gene expression does not involve either a decrease in TH mRNA stability or repression of TH promoter activity. However, repression results from inhibition of RNA elongation at a downstream region of the TH gene. This elongation pause is accompanied by hpVHL sequestration in the nuclear extracts of elongins B and C, regulatory components of the transcription elongation heterotrimer SIII (elongin A/B/C). Hypoxia, a physiological stimulus for TH gene expression, alleviates the elongation block. A truncated pVHL mutant, pVHL(1-115), stimulates TH gene expression by increasing the efficiency of TH transcript elongation. This is the first report showing pVHL-dependent regulation of specific transcript elongation in vivo, as well as dominant negative activity of pVHL mutants in pheochromocytoma cells.