Transcript elongation can be interrupted by a variety of obstacles, including certain DNA sequences, DNA-binding proteins, chromatin, and DNA lesions. Bypass of many of these impediments is facilitated by elongation factor TFIIS through a mechanism that involves cleavage of the nascent transcript by the RNA polymerase II/TFIIS elongation complex. Highly purified yeast RNA polymerase II is able to perform transcript hydrolysis in the absence of TFIIS. The "intrinsic" cleavage activity is greatly stimulated at mildly basic pH and requires divalent cations. Both arrested and stalled complexes can carry out the intrinsic cleavage reaction, although not all stalled complexes are equally efficient at this reaction. Arrested complexes in which the nascent transcript was cleaved in the absence of TFIIS were reactivated to readthrough blocks to elongation. Thus, cleavage of the nascent transcript is sufficient for reactivating some arrested complexes. Small RNA products released following transcript cleavage in stalled ternary complexes differ depending upon whether the cleavage has been induced by TFIIS or has occurred in mildly alkaline conditions. In contrast, both intrinsic and TFIIS-induced small RNA cleavage products are very similar when produced from an arrested ternary complex. Although alpha-amanitin interferes with the transcript cleavage stimulated by TFIIS, it has little effect on the intrinsic cleavage reaction. A mutant RNA polymerase previously shown to be refractory to TFIIS-induced transcript cleavage is essentially identical to the wild type polymerase in all tested aspects of intrinsic cleavage.