The Mediator complex is commonly seen as a molecular bridge that connects DNA-bound transcription factors to the RNA polymerase II (Pol II) machinery. It is a large complex of 30 subunits that is present in all eukaryotes. The Med12 subunit has been implicated not only in the regulation of Pol II activity, but also in the binding of transcription factors to the bulk of the Mediator complex. We targeted Med12 in mouse embryonic stem cells to investigate the in vivo function of this subunit. We report here the developmental defects of Med12 hypomorphic mutants that have a drastic reduction in Med12 protein levels. These mutants fail to develop beyond embryonic day 10 and have severe defects in neural tube closure, axis elongation, somitogenesis and heart formation. We show that in Med12 hypomorphic embryos, the Wnt/planar cell polarity pathway is disrupted and that canonical Wnt/beta-catenin signaling is impaired. In agreement with this, embryos that are incapable of Med12 expression failed to establish the anterior visceral endoderm or activate brachyury expression, and did not complete gastrulation.