Covalent modifications to histones are key epigenetic marks that control gene transcription. Multiple lysine residues on histone H3 are methylated (me), but their functions are unclear. Here, we demonstrate two phases of combinatorial and dynamic H3 methylation during induction of transcription at MET16 in yeast. K4me3 with K36me2/3 define a postinitiation regulatory phase and precede the appearance of K4me2 with K79me2 at the onset of transcript elongation. The Isw1 ATPase delays the release of initiated RNA polymerase II (RNAPII) into elongation to facilitate chromatin modifications. The Spp1 subunit of complex associated with Set1 (COMPASS) and Set2, determining K4me3 and K36me2/3, respectively, are required for transient NuA4-dependent H4K8ac. This releases RNAPII from Isw1 control and promotes controlled transcription elongation and termination. We propose that newly initiated RNAPII is under epigenetic control.