A novel transcription factor that stimulates synthesis of accurately initiated transcripts by mammalian RNA polymerase II has been identified and purified to apparent homogeneity from rat liver extracts (Bradsher, J. N., Jackson, K. W., Conaway, R. C., Conaway, J. W. (1993) J. Biol. Chem. 268, 25587-25593). This factor, which we designate SIII, has a native molecular mass of approximately 140 kDa and is composed of three polypeptides of 110, 18, and 15 kDa. In this report, we demonstrate that SIII stimulates promoter-specific transcription by increasing the overall rate of RNA chain elongation by RNA polymerase II. Results of pulse-chase experiments indicate that SIII does not need to be present during preinitiation complex formation or transcription initiation in order to stimulate promoter-specific transcription. In addition, SIII is able to stimulate the rate of RNA chain elongation by RNA polymerase II during transcription of double stranded oligo(dC)-tailed templates. Taken together, these findings indicate that the factor exerts its activity directly on the elongation complex.