The Mediator complex has been described as a general transcription factor, but it is unclear if it is essential for Pol II transcription and/or is a required component of the preinitiation complex (PIC) in vivo. Here, we show that depletion of individual subunits, even those essential for cell growth, causes a general but only modest decrease in transcription. In contrast, simultaneous depletion of all Mediator modules causes a drastic decrease in transcription. Depletion of head or middle subunits, but not tail subunits, causes a downstream shift in the Pol II occupancy profile, suggesting that Mediator at the core promoter inhibits promoter escape. Interestingly, a functional PIC and Pol II transcription can occur when Mediator is not detected at core promoters. These results provide strong evidence that Mediator is essential for Pol II transcription and stimulates PIC formation, but it is not a required component of the PIC in vivo.