The kinase activity of positive transcription elongation factor b (P-TEFb), composed of cyclin-dependent kinase 9 and cyclin T1 or T2, is required for the transition of RNA polymerase II into productive elongation. P-TEFb activity has been shown to be negatively regulated by association with the small nuclear RNA 7SK and the HEXIM1 protein. Here, we characterize HEXIM2, a previously predicted protein with sequence similarity to HEXIM1. HEXIM2 is expressed in HeLa and Jurkat cells, and glycerol gradient analysis and immunoprecipitations indicate that HEXIM2, like HEXIM1, has a regulated association with P-TEFb. As HEXIM1 is knocked down, HEXIM2 functionally compensates for its association with P-TEFb. Electrophoretic mobility shift assays and in vitro kinase assays demonstrate that HEXIM2 forms complexes containing 7SK and P-TEFb and, in conjunction with 7SK, inhibits P-TEFb kinase activity. Our results provide strong evidence that HEXIM2 is a regulator of P-TEFb function. Furthermore, our results support the idea that the utilization of HEXIM1 or HEXIM2 to bind and inhibit P-TEFb can be differentially regulated in vivo.