Posttranslational modifications (PTMs) of proteins play essential roles in regulating signaling, protein-protein modifications and subcellular localization. In this review, we focus on posttranslational modification of histones and RNA polymerase II (RNAPII) and their roles in gene transcription. A survey of the basic features of PTMs is provided followed by a more detailed account of how PTMs on histones and RNAPII regulate transcription in the model organism Saccharomyces cerevisiae. We emphasize the interconnections between histone and RNAPII PTMs and speculate upon the larger role PTMs have in regulating protein function in the cell.