The Cdk8 kinase module (CKM) in Mediator, comprising Med13, Med12, CycC, and Cdk8, regulates RNA polymerase II transcription through kinase-dependent and -independent functions. Numerous pathogenic mutations causative for neurodevelopmental disorders and cancer congregate in CKM subunits. However, the structure of the intact CKM and the mechanism by which Cdk8 is non-canonically activated and functionally affected by oncogenic CKM alterations are poorly understood. Here, we report a cryo-electron microscopy structure of Saccharomyces cerevisiae CKM that redefines prior CKM structural models and explains the mechanism of Med12-dependent Cdk8 activation. Med12 interacts extensively with CycC and activates Cdk8 by stabilizing its activation (T-)loop through conserved Med12 residues recurrently mutated in human tumors. Unexpectedly, Med13 has a characteristic Argonaute-like bi-lobal architecture. These findings not only provide a structural basis for understanding CKM function and pathological dysfunction, but also further impute a previously unknown regulatory mechanism of Mediator in transcriptional modulation through its Med13 Argonaute-like features.