The transcription cycle of RNA polymerase II (Pol II) is regulated at discrete transition points by cyclin-dependent kinases (CDKs). Positive transcription elongation factor b (P-TEFb), a complex of Cdk9 and cyclin T1, promotes release of paused Pol II into elongation, but the precise mechanisms and targets of Cdk9 action remain largely unknown. Here, by a chemical genetic strategy, we identified ∼ 100 putative substrates of human P-TEFb, which were enriched for proteins implicated in transcription and RNA catabolism. Among the RNA processing factors phosphorylated by Cdk9 was the 5'-to-3' "torpedo" exoribonuclease Xrn2, required in transcription termination by Pol II, which we validated as a bona fide P-TEFb substrate in vivo and in vitro. Phosphorylation by Cdk9 or phosphomimetic substitution of its target residue, Thr439, enhanced enzymatic activity of Xrn2 on synthetic substrates in vitro. Conversely, inhibition or depletion of Cdk9 or mutation of Xrn2-Thr439 to a nonphosphorylatable Ala residue caused phenotypes consistent with inefficient termination in human cells: impaired Xrn2 chromatin localization and increased readthrough transcription of endogenous genes. Therefore, in addition to its role in elongation, P-TEFb regulates termination by promoting chromatin recruitment and activation of a cotranscriptional RNA processing enzyme, Xrn2.