Cells often fine-tune gene expression at the level of transcription to generate the appropriate response to a given environmental or developmental stimulus. Both positive and negative influences on gene expression must be balanced to produce the correct level of mRNA synthesis. To this end, the cell uses several classes of regulatory coactivator complexes including two central players, TFIID and Mediator (MED), in potentiating activated transcription. Both of these complexes integrate activator signals and convey them to the basal apparatus. Interestingly, many promoters require both regulatory complexes, although at first glance they may seem to be redundant. Here we have used RNA interference (RNAi) in Drosophila cells to selectively deplete subunits of the MED and TFIID complexes to dissect the contribution of each of these complexes in modulating activated transcription. We exploited the robust response of the metallothionein genes to heavy metal as a model for transcriptional activation by analyzing direct factor recruitment in both heterogeneous cell populations and at the single-cell level. Intriguingly, we find that MED and TFIID interact functionally to modulate transcriptional response to metal. The metal response element-binding transcription factor-1 (MTF-1) recruits TFIID, which then binds promoter DNA, setting up a "checkpoint complex" for the initiation of transcription that is subsequently activated upon recruitment of the MED complex. The appropriate expression level of the endogenous metallothionein genes is achieved only when the activities of these two coactivators are balanced. Surprisingly, we find that the same activator (MTF-1) requires different coactivator subunits depending on the context of the core promoter. Finally, we find that the stability of multi-subunit coactivator complexes can be compromised by loss of a single subunit, underscoring the potential for combinatorial control of transcription activation.