The APC tumor suppressor controls the stability and nuclear export of beta-catenin (beta-cat), a transcriptional coactivator of LEF-1/TCF HMG proteins in the Wnt/Wg signaling pathway. We show here that beta-cat and APC have opposing actions at Wnt target genes in vivo. The beta-cat C-terminal activation domain associates with TRRAP/TIP60 and mixed-lineage-leukemia (MLL1/MLL2) SET1-type chromatin-modifying complexes in vitro, and we show that beta-cat promotes H3K4 trimethylation at the c-Myc gene in vivo. H3K4 trimethylation in vivo requires prior ubiquitination of H2B, and we find that ubiquitin is necessary for transcription initiation on chromatin but not nonchromatin templates in vitro. Chromatin immunoprecipitation experiments reveal that beta-cat recruits Pygopus, Bcl-9/Legless, and MLL/SET1-type complexes to the c-Myc enhancer together with the negative Wnt regulators, APC, and betaTrCP. Interestingly, APC-mediated repression of c-Myc transcription in HT29-APC colorectal cancer cells is initiated by the transient binding of APC, betaTrCP, and the CtBP corepressor to the c-Myc enhancer, followed by stable binding of the TLE-1 and HDAC1 corepressors. Moreover, nuclear CtBP physically associates with full-length APC, but not with mutant SW480 or HT29 APC proteins. We conclude that, in addition to regulating the stability of beta-cat, APC facilitates CtBP-mediated repression of Wnt target genes in normal, but not in colorectal cancer cells.