Autoimmune regulator (AIRE) is a transcription factor that induces the expression of a large subset of otherwise strictly tissue restricted antigens in medullary thymic epithelial cells, thereby enabling their presentation to developing T cells for negative selection. Mutations in AIRE lead to autoimmune-polyendocrinopathy-candidiasis-ectodermal dystrophy (APECED), a rare monogenetic disease. Although it has been reported that AIRE interacts with proteins involved in nuclear transport, DNA-damage response, chromatin remodeling, transcription and pre-mRNA-splicing, the precise mechanism of AIRE-induced tissue restricted antigen expression has remained elusive. In this study, we investigated an APECED patient mutation that causes the loss of the extreme C-terminus of AIRE and found that this mutant protein is transcriptionaly inactive. When tethered heterologously to DNA, this domain could stimulate transcription and splicing by itself. Moreover, the loss of this C-terminus disrupted interactions with the positive transcription elongation factor b (P-TEFb). Via P-TEFb, AIRE increased levels of RNA polymerase II on and enhanced pre-mRNA splicing of heterologous and endogenous target genes. Indeed, the inhibition of CDK9, the kinase subunit of P-TEFb, inhibited AIRE-induced pre-mRNA splicing of these genes. Thus, AIRE requires P-TEFb to activate transcription elongation and co-transcriptional processing of target genes.