Several factors have been biochemically characterized based on their ability to increase the overall rate of transcription elongation catalyzed by the multiprotein complex RNA polymerase II (Pol II). Among these, the ELL family of elongation factors has been shown to increase the catalytic rate of transcription elongation in vitro by suppressing transient pausing. Several fundamental biological aspects of this class of elongation factors are not known. We have cloned the Drosophila homolog (dELL) in order to test whether ELL family proteins are actually associated with the elongating Pol II in vivo. Here we report that dELL is a nuclear protein, which, like its mammalian homologs, can increase the catalytic rate of transcription elongation by Pol II in vitro. Interestingly, we find that dELL co-localizes extensively with the phosphorylated, actively elongating form of Pol II at transcriptionally active sites on Drosophila polytene chromosomes. Furthermore, dELL is relocalized from a widespread distribution pattern on polytenes under normal conditions to very few transcriptionally active puff sites upon heat shock. This observation indicates a dynamic pattern of localization of dELL in cells, which is a predicted characteristic of a Pol II general elongation factor. We also demonstrate that dELL physically interacts with Pol II. Our results strongly suggest that dELL functions with elongating RNA polymerase II in vivo.