Signal transduction within the canonical Wnt/beta-catenin pathway drives development and carcinogenesis through programmed or unprogrammed changes in gene transcription. Although the upstream events linked to signal-induced activation of beta-catenin in the cytoplasm have been deciphered in considerable detail, much less is known regarding the mechanism by which beta-catenin stimulates target gene transcription in the nucleus. Here, we show that beta-catenin physically and functionally targets the MED12 subunit in Mediator to activate transcription. The beta-catenin transactivation domain bound directly to isolated MED12 and intact Mediator both in vitro and in vivo, and Mediator was recruited to Wnt-responsive genes in a beta-catenin-dependent manner. Disruption of the beta-catenin/MED12 interaction through dominant-negative interference- or RNA interference-mediated MED12 suppression inhibited beta-catenin transactivation in response to Wnt signaling. This study thus identifies the MED12 interface within Mediator as a new component and a potential therapeutic target in the Wnt/beta-catenin pathway.