Ligand-dependent transcriptional activation by nuclear receptors involves the recruitment of various coactivators to the promoters of hormone-regulated genes assembled into chromatin. Nuclear receptor coactivators include histone acetyltransferase complexes, such as p300/CBP-steroid receptor coactivator (SRC), as well as the multisubunit mediator complexes (“Mediator”), which may help recruit RNA polymerase II to the promoter. We have used a biochemical approach, including an in vitro chromatin assembly and transcription system, to examine the functional role for Mediator in the transcriptional activity of estrogen receptor α (ERα) with chromatin templates, as well as functional interplay between Mediator and p300/CBP during ERα-dependent transcription. Using three different approaches to functionally inactivate Mediator (immunoneutralization, immunodepletion, and inhibitory polypeptides), we find that Mediator is required for maximal transcriptional activation by ligand-activated ERα. In addition, we demonstrate synergism between Mediator and p300/CBP-SRC during ERα-dependent transcription with chromatin templates, but not with naked DNA. This synergism is important for promoting the formation of a stable transcription preinitiation complex leading to the initiation of transcription. Interestingly, we find that Mediator has an additional distinct role during ERα-dependent transcription not shared by p300/CBP-SRC: namely, to promote preinitiation complex formation for subsequent rounds of transcription reinitiation. These results suggest that one functional consequence of Mediator-ERα interactions is the stimulation of multiple cycles of transcription reinitiation. Collectively, our results indicate an important role for Mediator, as well as its functional interplay with p300/CBP-SRC, in the enhancement of ERα-dependent transcription with chromatin templates.