The human Mediator coactivator complex interacts with many transcriptional activators and facilitates recruitment of RNA polymerase II to promote target gene transcription. The MED25 subunit is a critical target of the potent herpes simplex 1 viral transcriptional activator VP16. Here we determine the solution structure of the MED25 VP16-binding domain (VBD) and define its binding site for the N-terminal portion of the VP16 transactivation domain (TADn). A hydrophobic furrow, formed by a β-barrel and two α-helices in MED25 VBD, interacts tightly with VP16 TADn. Mutations in this furrow prevent binding of VP16 TAD to MED25 VBD and interfere with the ability of overexpressed MED25 VBD to inhibit VP16-dependent transcriptional activation in vivo. This detailed molecular understanding of transactivation by the benchmark activator VP16 could provide important insights into viral and cellular gene activation mechanisms.