Despite the important role of Polycomb in genome-wide silencing, little is known of the specific biochemical mechanism by which it inactivates transcription. Here we address how recombinant Polycomb repressive complex 1 (PRC1) inhibits activated RNA polymerase II preinitiation complex (PIC) assembly using immobilized H3K27-methylated chromatin templates in vitro. Recombinant PRC1 inhibited transcription, but had little effect on binding of the activator as reported previously. In contrast, Mediator and the general transcription factors were blocked during assembly or dissociated from preassembled PICs. Importantly, among the PIC components, Tata Binding Protein (TBP) was the most resistant to eviction by PRC1. Immobilized template experiments using purified PRC1, transcription factor II D (TFIID), and Mediator indicate that PRC1 blocks the recruitment of Mediator, but not TFIID. We conclude that PRC1 functions to block or dissociate PICs by interfering with Mediator, but leaves TBP and perhaps TFIID intact, highlighting a specific mechanism for PRC1 transcriptional silencing. Analysis of published genome-wide datasets from mouse embryonic stem cells revealed that the Ring1b subunit of PRC1 and TBP co-enrich at developmental genes. Further, genes enriched for Ring1b and TBP are expressed at significantly lower levels than those enriched for Mediator, TBP, and Ring1b. Collectively, the data are consistent with a model in which PRC1 and TFIID could co-occupy genes poised for activation during development.