Coordinated expression of replication-dependent (RD) histones genes occurs within the Histone Locus Body (HLB) during S phase, but the molecular steps in transcription that are cell cycle regulated are unknown. We report that Drosophila RNA Pol II promotes HLB formation and is enriched in the HLB outside of S phase, including G1-arrested cells that do not transcribe RD histone genes. In contrast, the transcription elongation factor Spt6 is enriched in HLBs only during S phase. Proliferating cells in the wing and eye primordium express full-length histone mRNAs during S phase but express only short nascent transcripts in cells in G1 or G2 consistent with these transcripts being paused and then terminated. Full-length transcripts are produced when Cyclin E/Cdk2 is activated as cells enter S phase. Thus, activation of transcription elongation by Cyclin E/Cdk2 and not recruitment of RNA pol II to the HLB is the critical step that links histone gene expression to cell cycle progression in Drosophila.