Elongation factor SII is required to increase the efficiency of transcription by RNA polymerase II through intrinsic arrest sites. RNA polymerase II ternary complexes exhibit a ribonuclease activity in the presence of SII, truncating nascent transcripts in a 3'-->5' direction. We show here that transcript cleavage is an obligatory step in re-establishing the elongation competency of complexes that have become blocked in elongation at an intrinsic arrest site. SII-facilitated transcript cleavage by these arrested complexes released 7-14 nucleotide RNA fragments. In contrast, SII-facilitated transcript cleavage by elongation competent complexes, which are stalled because of the absence of a nucleoside triphosphate from the reaction mixture, occurred primarily in dinucleotide increments. We can partially recreate the arrested phenotype and the preference for the large cleavage increment by stalling ternary complexes such that the 3'-end of the transcript contains consecutive U residues, which mimics the sequence of the 3'-ends of transcripts in arrested complexes.