In fission yeast, centromeric heterochromatin is necessary for the fidelity of chromosome segregation. Propagation of heterochromatin in dividing cells requires RNA interference (RNAi) and transcription of centromeric repeats by RNA polymerase II during the S phase of the cell cycle. We found that the Med8-Med18-Med20 submodule of the Mediator complex is required for the transcriptional regulation of native centromeric dh and dg repeats and for the silencing of reporter genes inserted in centromeric heterochromatin. Mutations in the Med8-Med18-Med20 submodule did not alter Mediator occupancy at centromeres; however, they led to an increased recruitment of RNA polymerase II to centromeres and reduced levels of centromeric H3K9 methylation accounting for the centromeric desilencing. Further, we observed that Med18 and Med20 were required for efficient processing of dh transcripts into siRNA. Consistent with defects in centromeric heterochromatin, cells lacking Med18 or Med20 displayed elevated rates of mitotic chromosome loss. Our data demonstrate a role for the Med8-Med18-Med20 Mediator submodule in the regulation of non-coding RNA transcription at Schizosaccharomyces pombe centromeres. In wild-type cells this submodule limits RNA polymerase II access to the heterochromatic DNA of the centromeres. Additionally, the submodule may act as an assembly platform for the RNAi machinery or regulate the activity of the RNAi pathway. Consequently, Med8-Med18-Med20 is required for silencing of centromeres and proper mitotic chromosome segregation.