Many steps in gene expression and mRNA biosynthesis are coupled to transcription elongation and organized through the C-terminal domain (CTD) of the large subunit of RNA polymerase II (RNAPII). We showed recently that Spt6, a transcription elongation factor and histone H3 chaperone, binds to the Ser2P CTD and recruits Iws1 and the REF1/Aly mRNA export adaptor to facilitate mRNA export. Here we show that Iws1 also recruits the HYPB/Setd2 histone methyltransferase to the RNAPII elongation complex and is required for H3K36 trimethylation (H3K36me3) across the transcribed region of the c-Myc, HIV-1, and PABPC1 genes in vivo. Interestingly, knockdown of either Iws1 or HYPB/Setd2 also enhanced H3K27me3 at the 5' end of the PABPC1 gene, and depletion of Iws1, but not HYPB/Setd2, increased histone acetylation across the coding regions at the HIV-1 and PABPC1 genes in vivo. Knockdown of HYPB/Setd2, like Iws1, induced bulk HeLa poly(A)+ mRNAs to accumulate in the nucleus. In vitro, recombinant Spt6 binds selectively to a stretch of uninterrupted consensus repeats located in the N-terminal half of the CTD and recruits Iws1. Thus Iws1 connects two distinct CTD-binding proteins, Spt6 and HYPB/Setd2, in a megacomplex that affects mRNA export as well as the histone modification state of active genes.