Although it is established that some general transcription factors are inactivated at mitosis, many details of mitotic transcription inhibition (MTI) and its underlying mechanisms are largely unknown. We have identified mitotic transcriptional activation (MTA) as a key regulatory step to control transcription in mitosis for genes with transcriptionally engaged RNA polymerase II (Pol II) to activate and transcribe until the end of the gene to clear Pol II from mitotic chromatin, followed by global impairment of transcription reinitiation through MTI. Global nascent RNA sequencing and RNA fluorescence in situ hybridization demonstrate the existence of transcriptionally engaged Pol II in early mitosis. Both genetic and chemical inhibition of P-TEFb in mitosis lead to delays in the progression of cell division. Together, our study reveals a mechanism for MTA and MTI whereby transcriptionally engaged Pol II can progress into productive elongation and finish transcription to allow proper cellular division. Display omitted •Mitotic transcription inhibition occurs in early mitosis•P-TEFb is required for mitotic transcriptional activation and release of paused Pol II•Nascent RNA-seq and RNA FISH reveal active transcription at the onset of mitosis•Inhibition of mitotic transcriptional activation delays cell-cycle progression How transcription is shut down as cells begin to condense chromosomes during mitosis is poorly understood. Liang et al. report the requirement of mitotic transcriptional activation by P-TEFb to release paused Pol II as a prerequisite for this process, and ultimately for proper cell-cycle progression.