A combination of crystallography, biochemistry, and gene expression analysis identifies the coactivator subcomplex Med8C/18/20 as a functionally distinct submodule of the Mediator head module. Med8C forms a conserved alpha-helix that tethers Med18/20 to the Mediator. Deletion of Med8C in vivo results in dissociation of Med18/20 from Mediator and in loss of transcription activity of extracts. Deletion of med8C, med18, or med20 causes similar changes in the yeast transcriptome, establishing Med8C/18/20 as a predominantly positive, gene-specific submodule required for low transcription levels of nonactivated genes, including conjugation genes. The presented structure-based system perturbation is superior to gene deletion analysis of gene regulation.