Regulated intramembrane proteolysis of the amyloid precursor‐protein (APP) produces both a characterstic amyloid‐β peptide that contributes to neuritic plaque formation and neurodegeneration in Alzheimer disease and a small APP intracellular domain (AICD) that transcriptionally activates genes implicated in Alzheimer disease pathology. Although the biochemical events leading to amyloidogenic APP processing at the cell membrane have been described in detail, comparably little is known about the mechanistic basis of AICD‐dependent gene regulation in the nucleus. In this study, we show that the AICD activates transcription by targeting MED12, an RNA polymerase II transcriptional Mediator subunit that is implicated in human cognitive development. The AICD binds to MED12/Mediator in vitro and in vivo. Disruption of the AICD/MED12 interaction inhibits AICD transactivation potential and expression of AICD target genes. Mediator, in a MED12‐dependent manner, occupies only AICD‐bound promoter DNA, indicating that the AICD recruits Mediator to activate transcription. These results identify the MED12 interface in Mediator as a crucial transducer of AICD transactivation and a potential therapeutic target in Alzheimer disease.