The Cdk8 (cyclin-dependent kinase 8) module of Mediator integrates regulatory cues from transcription factors to RNA polymerase II. It consists of four subunits where Med12 and Med13 link Cdk8 and cyclin C (CycC) to core Mediator. Here we have investigated the contributions of the Cdk8 module subunits to transcriptional regulation using RNA interference in Drosophila cells. Genome-wide expression profiling demonstrated separation of Cdk8-CycC and Med12-Med13 profiles. However, transcriptional regulation by Cdk8-CycC was dependent on Med12-Med13. This observation also revealed that Cdk8-CycC and Med12-Med13 often have opposite transcriptional effects. Interestingly, Med12 and Med13 profiles overlapped significantly with that of the GATA factor Serpent. Accordingly, mutational analyses indicated that GATA sites are required for Med12-Med13 regulation of Serpent-dependent genes. Med12 and Med13 were also found to be required for Serpent-activated innate immunity genes in defense to bacterial infection. The results reveal a novel role for the Cdk8 module in Serpent-dependent transcription and innate immunity.