Quantitative transcriptional control is essential for physiological and developmental processes in many organisms. Transcriptional output is influenced by cotranscriptional processes interconnected to chromatin regulation, but how the functions of different cotranscriptional regulators are integrated is poorly understood. The Arabidopsis floral repressor locus FLOWERING LOCUS C (FLC) is cotranscriptionally repressed by alternative processing of the antisense transcript COOLAIR. Proximal 3′-end processing of COOLAIR resolves a cotranscriptionally formed R-loop, and this process physically links to a histone-modifying complex FLD/SDG26/LD. This induces a chromatin environment locally that determines low transcription initiation and a slow elongation rate to both sense and antisense strands. Here, we show that ARGONAUTE1 (AGO1) genetically functions in this cotranscriptional repression mechanism. AGO1 associates with COOLAIR and influences COOLAIR splicing dynamics to promote proximal COOLAIR, R-loop resolution, and chromatin silencing. Proteomic analyses revealed physical associations between AGO1, subunits of RNA Polymerase II (Pol II), the splicing-related proteins-the spliceosome NineTeen Complex (NTC) and related proteins (NTR)-and the THO/TREX complex. We connect these activities by demonstrating that the THO/TREX complex activates FLC expression acting antagonistically to AGO1 in COOLAIR processing. Together these data reveal that antagonistic cotranscriptional regulation through AGO1 or THO/TREX influences COOLAIR processing to deliver a local chromatin environment that determines FLC transcriptional output. The involvement of these conserved cotranscriptional regulators suggests similar mechanisms may underpin quantitative transcriptional regulation generally.