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 G(1)-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 G(1) or G(2) 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.