Histone modifications play an important role in transcription. We previously studied histone H2B ubiquitylation on lysine 123 and subsequent deubiquitylation by SAGA-associated Ubp8. Unlike other histone modifications, both the addition and removal of ubiquitin are required for optimal transcription. Here we report that deubiquitylation of H2B is important for recruitment of a complex containing the kinase Ctk1, resulting in phosphorylation of the RNA polymerase II (Pol II) C-terminal domain (CTD), and for subsequent recruitment of the Set2 methyltransferase. We find that Ctk1 interacts with histones H2A and H2B, and that persistent H2B ubiquitylation disrupts these interactions. We further show that Ubp8 enters the GAL1 coding region through an interaction with Pol II. These findings reveal a mechanism by which H2B ubiquitylation acts as a barrier to Ctk1 association with active genes, while subsequent deubiquitylation by Ubp8 triggers Ctk1 recruitment at the appropriate point in activation.