The Mediator complex of Saccharomyces cerevisiae is required for both general and regulated transcription of RNA polymerase II (PolII) and is composed of two stable subcomplexes (Srb4 and Rgr1 subcomplexes). To decipher the function of each Mediator subcomplex and to delineate the functional relationship between the subcomplexes, we characterized the compositions and biochemical activities of PolII-Mediator complexes (holoenzymes) prepared from several Mediator mutant strains of S. cerevisiae. We found that holoenzymes devoid of a functional Gal11 module were defective for activated but not basal transcription in a reconstituted in vitro system. This activation-specific defect was correlated with a crippled physical interaction to transcriptional activator proteins, which could be bypassed by artificial recruitment of a mutant holoenzyme to a promoter. Consistent with this observation, a direct interaction between Gal11 and gene-specific transcriptional activator proteins was detected by far-Western analyses and column binding assays. In contrast, the srb5 deletion mutant holoenzyme was defective for both basal and activated transcription, despite its capacity for activator binding that is comparable to that of the wild-type holoenzyme. These results demonstrate that the Gal11 module of the Rgr1 subcomplex is required for the efficient recruitment of PolII holoenzyme to a promoter via activator-specific interactions, while the Srb4 subcomplex functions in the modulation of general polymerase activity.