The yeast zinc cluster transcription factor Oaf1p activates transcription of target genes in response to direct binding of fatty acids in a manner analogous to the vertebrate nuclear receptor peroxisome proliferator-activated receptoralpha (PPARalpha). PPARs and other metazoan nuclear receptors productively engage several distinct LXXLL motif-containing co-activators, including p160 family members and the TRAP220/MED1 subunit of the Mediator co-activator, to promote ligand-dependent gene activation. Yeast, however, does not appear to harbor LXXLL motif co-activators, and the mechanism of fatty acid-dependent gene activation by the yeast PPARalpha analog Oaf1p is unknown. Here we show that the yeast Mediator subunit Gal11p/MED15 and its activator-targeted KIX domain plays a critical role in fatty acid-dependent transcriptional regulation of fatty acid beta-oxidation and peroxisomal genes by Oaf1p and for the ability of yeast to utilize fatty acids as a sole carbon source. Moreover, structural studies by NMR spectroscopy reveal that the Oaf1p activation domain interacts with the Gal11p/MED15 KIX domain in a manner similar to the yeast zinc cluster family member and xenobiotic receptor Pdr1p, revealing that the Gal11p/MED15 KIX domain is a key target of several ligand-dependent transcription factors in yeast. Together with previous work showing that the Caenorhabditis elegans Gal11p/MED15 homolog MDT-15 plays a critical role in regulation of fatty acid metabolism by the nematode PPAR-like nuclear receptor NHR-49, the findings presented here provide evidence for an ancient and essential role of a Mediator co-activator subunit in regulation of fatty acid metabolism by nuclear receptor-like transcription factors in eukaryotes.