Progenitors in epithelial tissues, such as human skin epidermis, continuously make fate decisions between self-renewal and differentiation. Here we show that the Super Elongation Complex (SEC) controls progenitor fate decisions by directly suppressing a group of “rapid response” genes, which feature high enrichment of paused Pol II in the progenitor state and robust Pol II elongation in differentiation. SEC’s repressive role is dependent on the AFF1 scaffold, but not AFF4. In the progenitor state, AFF1-SEC associates with the HEXIM1-containing inactive CDK9 to suppress these rapid-response genes. A key rapid-response SEC target is ATF3, which promotes the upregulation of differentiation-activating transcription factors (GRHL3, OVOL1, PRDM1, ZNF750) to advance terminal differentiation. SEC peptidomimetic inhibitors or PKC signaling activates CDK9 and rapidly induces these transcription factors within hours in keratinocytes. Thus, our data suggest that the activity switch of SEC-associated CDK9 underlies the initial processes bifurcating progenitor fates between self-renewal and differentiation.