Spt5 is a universally conserved multidomain transcription elongation factor that acts as a component of all Pol II elongation complexes. Structural studies indicate that several of Spt5s central KOW domains lie adjacent to the Pol II stalk, composed of subunits Rpb4 and Rpb7. However, their in vivo functions are unknown. Here we show that Spt5 and Rpb4/7 jointly modulate 3-end formation and co-transcriptional chromatin integrity in Saccharomyces cerevisiae. We identify mutations in the SPT5KOW2-3 domains and RPB7 that cause cryptic initiation of transcription and alter 3-end formation of RNA transcripts. Molecular readthrough assays reveal allele-specific changes at both GAL10 and SNR13, consistent with impacts on CPF/CF- and NNS-dependent termination. Proteomic experiments with isolated KOW2-3 domain enrich factors from both pathways as well as chromatin regulators, overlapping known Rpb7 interactors. Together, these findings support a model in which Spt5 KOW2-3/Pol II stalk region acts as a recruitment platform that coordinates pre-mRNA processing and chromatin dynamics during elongation, revealing new roles for the central KOW domains of Spt5.