The yeast Mediator is composed of two subcomplexes, Rgr1 and Srb4, known to be required for diverse aspects of transcriptional regulation; however, their structural and functional organizations have not yet been deciphered in detail. Biochemical analyses designed to determine the subunit composition of the Rgr1 subcomplex revealed that the regulator-interacting subcomplex has a modular structure and is composed of the Gal11, Med9/Cse2, and Med10/Nut2 modules. Genome-wide gene expression and Northern analyses performed in the presence or absence of the various Mediator modules revealed a distinct requirement for the Gal11, Med9/Cse2, and Med10/Nut2 modules in transcriptional repression as well as activation. GST pull-down analysis revealed that the transcriptional repressor Tup1 binds to distinct but overlapping regions of the Gal11 module that were shown previously to be transcriptional activator binding sites. These data suggest that competition between transcriptional activators and repressors for a common binding site in the Mediator and distinct conformational changes in the Mediator induced by repressor binding may underlie the mechanism of transcriptional repression in eukaryotes.