Pausing of RNA polymerase II (Pol II) close to promoters is a common regulatory step in RNA synthesis, and is coordinated by a ribonucleoprotein complex scaffolded by the noncoding RNA RN7SK. The function of RN7SK-regulated gene transcription in adult tissue homoeostasis is currently unknown. Here, we deplete RN7SK during mouse and human epidermal stem cell differentiation. Unexpectedly, loss of this small nuclear RNA specifically reduces transcription of numerous cell cycle regulators leading to cell cycle exit and differentiation. Mechanistically, we show that RN7SK is required for efficient transcription of highly expressed gene pairs with bidirectional promoters, which in the epidermis co-regulated cell cycle and chromosome organization. The reduction in transcription involves impaired splicing and RNA decay, but occurs in the absence of chromatin remodelling at promoters and putative enhancers. Thus, RN7SK is directly required for efficient Pol II transcription of highly transcribed bidirectional gene pairs, and thereby exerts tissue-specific functions, such as maintaining a cycling cell population in the epidermis.