The RNA polymerase II largest subunit C-terminal domain consists of repeated YSPTSPS heptapeptides. The role of tyrosine-1 (Tyr1) remains incompletely understood, as, for example, mutating all Tyr1 residues to Phe (Y1F) is lethal in vertebrates but a related mutant has only a mild phenotype in S. pombe. Here we show that Y1F substitution in budding yeast resulted in a strong slow-growth phenotype. The Y1F strain was also hypersensitive to several different cellular stresses that involve MAP kinase signaling. These phenotypes were all linked to transcriptional changes, and we also identified genetic and biochemical interactions between Tyr1 and both transcription initiation and termination factors. Further studies uncovered defects related to MAP kinase I (Slt2) pathways, and we provide evidence that Slt2 phosphorylates Tyr1 in vitro and in vivo. Our study has thus identified Slt2 as a Tyr1 kinase, and in doing so provided links between stress response activation and Tyr1 phosphorylation.