Fcp1 is a protein phosphatase that facilitates transcription elongation and termination by dephosphorylating the C-terminal domain of RNA polymerase II. High-throughput genetic screening and gene expression profiling of fcp1 mutants revealed a novel connection to Cdk8, the Mediator complex kinase subunit, and Skn7, a key transcription factor in the oxidative stress response pathway. Briefly, Skn7 was enriched as a regulator of genes whose mRNA levels were altered in fcp1 and cdk9 mutants and was required for the suppression of fcp1 mutant growth defects by loss of CDK8 under oxidative stress conditions. Targeted analysis revealed that mutating FCP1 decreased Skn7 mRNA and protein levels as well as its association with target gene promoters but paradoxically increased the mRNA levels of Skn7-dependent oxidative stress-induced genes (TRX2 and TSA1) under basal and induced conditions. The latter was in part recapitulated via chemical inhibition of transcription in WT cells, suggesting that a combination of transcriptional and posttranscriptional effects underscored the increased mRNA levels of TRX2 and TSA1 observed in the fcp1 mutant. Interestingly, loss of CDK8 robustly normalized the mRNA levels of Skn7-dependent genes in the fcp1 mutant background and also increased Skn7 protein levels by preventing its turnover. As such, our work suggested that loss of CDK8 could overcome transcriptional and/or posttranscriptional alterations in the fcp1 mutant through its regulatory effect on Skn7. Furthermore, our work also implicated FCP1 and CDK8 in the broader response to environmental stressors in yeast.