RNA polymerase II (RNAP II) transcription and pre-mRNA 3' end formation are linked through physical and functional interactions. We describe here a highly efficient yeast in vitro system that reproduces both transcription and 3' end formation in a single reaction. The system is based on simple whole-cell extracts that were supplemented with a hybrid Gal4-VP16 transcriptional activator and supercoiled plasmid DNA templates encoding G-less cassette reporters. We found that the coupling of transcription and processing in vitro enhanced pre-mRNA 3' end formation and reproduced requirements for poly(A) signals and polyadenylation factors. Unexpectedly, however, we show that in vitro transcripts lacked m(7)G-caps. Reconstitution experiments with CF IA factor assembled entirely from heterologous components suggested that the CTD interaction domain of the Pcf11 subunit was required for proper RNAP II termination but not 3' end formation. Moreover, we observed reduced termination activity associated with extracts prepared from cells carrying a mutation in the 5'-3' exonuclease Rat1 or following chemical inhibition of exonuclease activity. Thus, in vitro transcription coupled to pre-mRNA processing recapitulates hallmarks of poly(A)-dependent RNAP II termination. The in vitro transcription/processing system presented here should provide a useful tool to further define the role of factors involved in coupling.