The Paip2 protein is a factor regulating mRNA translation and stability in the cytoplasm. It has also been found in the nuclei of several cell types in Drosophila. Here, we aim to elucidate the functions of Paip2 in the cell nucleus. We find that nuclear Paip2 is a component of an ~300-kDa protein complex. Paip2 interacts with mRNA capping factor and factors of RNA polymerase II (Pol II) transcription initiation and early elongation. Paip2 functionally cooperates with the Cbp80 subunit of the cap-binding complex, with both proteins ensuring proper Pol II C-terminal domain (CTD) Ser5 phosphorylation at the promoter. Thus, Paip2 is a novel player at the stage of mRNA capping and early Pol II elongation.