Cleavage factor IA (CF IA), cleavage and polyadenylation factor (CPF), constitute major protein complexes required for pre-mRNA 3′ end formation in yeast. The Clp1 protein associates with Pcf11, Rna15 and Rna14 in CF IA but its functional role remained unclear. Clp1 carries an evolutionarily conserved P-loop motif that was previously shown to bind ATP. Interestingly, human and archaean Clp1 homologues, but not the yeast protein, carry 5′ RNA kinase activity. We show that depletion of Clp1 in yeast promoted defective 3′ end formation and RNA polymerase II termination; however, cells expressing Clp1 with mutant P-loops displayed only minor defects in gene expression. Similarly, purified and reconstituted mutant CF IA factors that interfered with ATP binding complemented CF IA depleted extracts in coupled in vitro transcription/3′ end processing reactions. We found that Clp1 was required to assemble recombinant CF IA and that certain P-loop mutants failed to interact with the CF IA subunit Pcf11. In contrast, mutations in Clp1 enhanced binding to the 3′ endonuclease Ysh1 that is a component of CPF. Our results support a structural role for the Clp1 P-loop motif. ATP binding by Clp1 likely contributes to CF IA formation and cross-factor interactions during the dynamic process of 3′ end formation.