Summary Transcription factors control cell specific gene expression programs through interactions with diverse coactivators and the transcription apparatus. Gene activation may involve DNA loop formation between enhancer-bound transcription factors and the transcription apparatus at the core promoter, but this process is not well understood. We report here that Mediator and Cohesin physically and functionally connect the enhancers and core promoters of active genes in embryonic stem cells. Mediator, a transcriptional coactivator, forms a complex with Cohesin, which can form rings that connect two DNA segments. The Cohesin loading factor Nipbl is associated with Mediator/Cohesin complexes, providing a means to load Cohesin at promoters. DNA looping is observed between the enhancers and promoters occupied by Mediator and Cohesin. Mediator and Cohesin occupy different promoters in different cells, thus generating cell-type specific DNA loops linked to the gene expression program of each cell.

Gene expression is controlled by transcription factors (TFs) that consist of DNA-binding domains (DBDs) and activation domains (ADs). The DBDs have been well-characterized, but little is known about the mechanisms by which ADs effect gene activation. Here we report that diverse ADs form phase-separated condensates with the Mediator coactivator. For the OCT4 and GCN4 TFs, we show that the ability to form phase-separated droplets with Mediator in vitro and the ability to activate genes in vivo are dependent on the same amino acid residues. For the estrogen receptor (ER), a ligand-dependent activator, we show that estrogen enhances phase separation with Mediator, again linking phase separation with gene activation. These results suggest that diverse TFs can interact with Mediator through the phase-separating capacity of their ADs and that formation of condensates with Mediator is involved in gene activation.

The RNA polymerase II (pol II) enzyme transcribes all protein-coding and most non-coding RNA genes and is globally regulated by Mediator, a large, conformationally flexible protein complex with variable subunit composition (for example, a four-subunit CDK8 module can reversibly associate). These biochemical characteristics are fundamentally important for Mediator's ability to control various processes important for transcription, including organization of chromatin architecture and regulation of pol II pre-initiation, initiation, re-initiation, pausing, and elongation. Although Mediator exists in all eukaryotes, a variety of Mediator functions appear to be specific to metazoans, indicative of more diverse regulatory requirements.

Recent advances in genomic research have revealed the existence of a large number of transcripts devoid of protein-coding potential in multiple organisms 1-8. While the functional role for long non-coding RNAs (lncRNAs) has been best defined in epigenetic phenomena such as X inactivation and imprinting, different classes of lncRNAs may have varied biological functions 8-13. We and others have identified a class of lncRNAs, termed ncRNA-activating (ncRNA-a), that function to activate their neighboring genes using a cis-mediated mechanism 5,14-16. To define the precise mode by which such enhancer-like RNAs function, we depleted factors with known roles in transcriptional activation and assessed their role in RNA-dependent activation. Here we report that depletion of the components of the co-activator complex, Mediator, specifically and potently diminished the ncRNA-induced activation of transcription in such a heterologous reporter assay. In vivo, Mediator is recruited to ncRNA-as target genes, and regulates their expression. We show that ncRNA-as interact with Mediator to regulate its chromatin localization and kinase activity toward histone H3 serine 10. Mediator complex harboring disease causing MED12 mutations 17,18 displays diminished ability to associate with activating ncRNAs. Chromosome conformation capture (3C) confirmed the presence of DNA looping between the ncRNA-a loci and its targets. Importantly, depletion of Mediator subunits or ncRNA-as reduced the chromatin looping between the two loci. Our results identify the human Mediator complex as the transducer of activating ncRNAs and highlight the importance of Mediator and activating ncRNAs association in human disease.

The synthesis of pre-mRNA by RNA polymerase II (Pol II) involves the formation of a transcription initiation complex and a transition to an elongation complex 1 – 4 . The large subunit of Pol II contains an intrinsically disordered C-terminal domain (CTD), which is phosphorylated by cyclin-dependent kinases (CDKs) during the initiation-to-elongation transition, thus influencing the CTD’s interaction with different components of the initiation or the RNA splicing apparatus ( Fig. 1a ) 5 , 6 . Recent observations suggest that this model provides only a partial picture of the effects of CTD phosphorylation. Both the transcription initiation machinery and the splicing machinery can form phase-separated condensates containing large numbers of component molecules; hundreds of Pol II and Mediator molecules are concentrated in condensates at super-enhancers 7 , 8 and large numbers of splicing factors are concentrated in nuclear speckles, some of which occur at highly active transcription sites 9 – 12 . Here we investigate whether phosphorylation of the CTD regulates its incorporation into phase-separated condensates associated with transcription initiation and splicing. We find that the hypophosphorylated Pol II CTD is incorporated into Mediator condensates and that phosphorylation by regulatory CDKs reduces this incorporation. We also find that the hyperphosphorylated CTD is preferentially incorporated into condensates formed by splicing factors. These results suggest that Pol II CTD phosphorylation drives an exchange from condensates involved in transcription initiation to those involved in RNA processing and implicates phosphorylation as a mechanism to regulate condensate preference.