Here we investigated how capping and methylation of HIV pre-mRNAs are coupled to Pol II elongation. Stable binding of the capping enzyme (Mce1) and cap methyltransferase (Hcm1) to template-engaged Pol II depends on CTD phosphorylation, but not on nascent RNA. Both Mce1 and Hcm1 travel with Pol II during elongation. The capping and methylation reactions cannot occur until the nascent pre-mRNA has attained a chain length of 19–22 nucleotides. HIV pre-mRNAs are capped quantitatively when elongation complexes are halted at promoter-proximal positions, but capping is much less efficient during unimpeded Pol II elongation. Cotranscriptional capping of HIV mRNA is strongly stimulated by Tat, and this stimulation requires the C-terminal segment of Tat that mediates its direct binding to Mce1. Our findings implicate capping in an elongation checkpoint critical to HIV gene expression.