hBRE1/RNF20 is the major E3 ubiquitin ligase for histone H2B. RNF20 depletion causes a global reduction of monoubiquitylated H2B (H2Bub) levels and augments the expression of growth-promoting, pro-oncogenic genes. Those genes reside preferentially in compact chromatin and are inefficiently transcribed under basal conditions. We now report that RNF20, presumably via H2Bub, selectively represses those genes by interfering with chromatin recruitment of TFIIS, a factor capable of relieving stalled RNA polymerase II. RNF20 inhibits the interaction between TFIIS and the PAF1 complex and hinders transcriptional elongation. TFIIS ablation selectively abolishes the upregulation of those genes upon RNF20 depletion and attenuates the cellular response to EGF. Consistent with its positive role in transcription of pro-oncogenic genes, TFIIS expression is elevated in various human tumors. Our findings provide a molecular mechanism for selective gene repression by RNF20 and position TFIIS as a key target of RNF20's tumor suppressor activity.