In higher eukaryotes, the large subunit of the general transcription factor TFIIA is encoded by the single TFIIAαβ gene and posttranslationally cleaved into α and β subunits. The molecular mechanisms and biological significance of this proteolytic process have remained obscure. Here, we show that TFIIA is a substrate of taspase 1 as reported for the trithorax group mixed-lineage leukemia protein. We demonstrate that recombinant taspase 1 cleaves TFIIA in vitro. Transfected taspase 1 enhances cleavage of TFIIA, and RNA interference knockdown of endogenous taspase 1 diminishes cleavage of TFIIA in vivo. In taspase 1-/- MEF cells, only uncleaved TFIIA is detected. In Xenopus laevis embryos, knockdown of TFIIA results in phenotype and expression defects. Both defects can be rescued by expression of an uncleavable TFIIA mutant. Our study shows that uncleaved TFIIA is transcriptionally active and that cleavage of TFIIA does not serve to render TFIIA competent for transcription. We propose that cleavage fine tunes the transcription regulation of a subset of genes during differentiation and development.