The Mediator complex of Saccharomyces cerevisiae is required for diverse aspects of transcription by RNA polymerase II (pol II). Mediator is composed of two functionally distinct subcomplexes, Rgr1 and Srb4. To identify the structures and functions of each subcomplex, we expressed recombinant proteins for each subunit and assayed their interactions with each other and with basal transcription proteins. The Rgr1 subcomplex is composed of the Gal11 module, which binds activators, and the Med9/10 module. The Med9/10 module is required for both transcriptional activation and repression, and these activities appear to be carried out by two submodules. Proteins in the Med9 submodule interact physically and genetically with Srb10/11, suggesting that the Med9 submodule mediates the repression of pol II. Purified recombinant Srb4 subcomplex stimulated basal transcription of pol II but had little effect on activated transcription and phosphorylation of the C-terminal domain of the Rpb1 subunit of pol II. Both subcomplexes of Mediator interacted with a distinct set of basal transcription factors and pol II. The modular organization of Mediator and the associated functions suggest that the Mediator complex may recruit and/or stabilize the preinitiation complex through several points of contact with transcriptional regulators and basal transcription factors.