PHF3 regulates neuronal gene expression through the new Pol II CTD reader domain SPOC

The C-terminal domain (CTD) of the largest subunit of RNA polymerase II (Pol II) is a regulatory hub for transcription and RNA processing. Here, we identify PHD-finger protein 3 (PHF3) as a new CTD-binding factor that negatively regulates transcription and mRNA stability. The PHF3 SPOC domain preferentially binds to CTD repeats phosphorylated on Serine-2 and PHF3 tracks with Pol II across the length of genes. PHF3 competes with TFIIS for Pol II binding through its TFIIS-like domain (TLD), thus inhibiting TFIIS-mediated rescue of backtracked Pol II. PHF3 knock-out or PHF3 SPOC deletion in human cells result in gene upregulation and a global increase in mRNA stability, with marked derepression of neuronal genes. Key neuronal genes are aberrantly expressed in Phf3 knock-out mouse embryonic stem cells, resulting in impaired neuronal differentiation. Our data suggest that PHF3 is a prominent effector of neuronal gene regulation at the interface of transcription elongation and mRNA decay.