The C-terminal domain of RNA polymerase II (CTD) is a repetitive heptad sequence (YSPTSPS) whose phosphorylation states coordinate eukaryotic transcription through their recruitment of protein regulators. The precise placement and removal of phosphate groups on specific residues of CTD heptads are critical for the fidelity and effectiveness of transcription. Despite highly similar flanking residues, different Ser-Pro motifs in the heptads are accurately recognized by the CTD kinases and phosphatases to coordinate the transcription cycle. The mechanism of accurate temporal control is not well understood. We use ultraviolet photodissociation mass spectrometry, kinetic assays, and structural analyses to dissect how different residues or PTMs at the heptad sequence affects subsequent post-translational modification events. We identified three structural motifs in kinases that determine the CTD residues they phosphorylate. The phosphorylation/dephosphorylation events during active transcription occur combinatorially: (1) the charges of the residues at the seventh position in CTD heptad determine which Tyr1 is getting phosphorylated. (2) Tyr1 phosphorylation directs the kinase activity of CTD kinase P-TEFb and alters its specificity from early transcriptional event (phosphoryl-Ser5) to late event (phosphoryl-Ser2). (3) Tyr1 and its phosphorylation ensure that CTD phosphatases Ssu72 only removes of Ser5 phosphorylation without interferes the accumulation of Ser2 phosphorylation. Overall, the cross-talks among CTD phosphorylation sites by the interplay of CTD kinases and phosphatases generate a heterogeneous CTD modification landscape that expands coding potential. These findings provide direct experimental evidence for a combinatorial CTD phosphorylation code wherein previously installed modifications direct the subsequent coding events, leading to differentiated transcription outcomes.