RNAP II is frequently paused near gene promoters in mammals, and its transition to productive elongation requires active recruitment of P-TEFb, a cyclin-dependent kinase for RNAP II and other key transcription elongation factors. A fraction of P-TEFb is sequestered in an inhibitory complex containing the 7SK noncoding RNA, but it has been unclear how P-TEFb is switched from the 7SK complex to RNAP II during transcription activation. We report that SRSF2 (also known as SC35, an SR-splicing factor) is part of the 7SK complex assembled at gene promoters and plays a direct role in transcription pause release. We demonstrate RNA-dependent, coordinated release of SRSF2 and P-TEFb from the 7SK complex and transcription activation via SRSF2 binding to promoter-associated nascent RNA. These findings reveal an unanticipated SR protein function, a role for promoter-proximal nascent RNA in gene activation, and an analogous mechanism to HIV Tat/TAR for activating cellular genes.