Histone methylation has emerged as an important mechanism for regulating the transcriptional accessibility of chromatin. Several methyltransferases have been shown to target histone amino-terminal tails and mark nucleosomes associated with either euchromatic or heterochromatic states. However, the biochemical machinery responsible for regulating histone methylation and integrating it with other cellular events has not been well characterized. We report here the purification, molecular identification, and genetic and biochemical characterization of the Set1 protein complex that is necessary for methylation of histone H3 at lysine residue 4 in Saccharomyces cerevisiae. The seven-member 363-kDa complex contains homologs of Drosophila melanogaster proteins Ash2 and Trithorax and Caenorhabditis elegans protein DPY-30, which are implicated in the maintenance of Hox gene expression and regulation of X chromosome dosage compensation, respectively. Mutations of Set1 protein comparable to those that disrupt developmental function of its Drosophila homolog Trithorax abrogate histone methylation in yeast. These studies suggest that epigenetic regulation of developmental and sex-specific gene expression are species-specific readouts for a common chromatin remodeling machinery associated mechanistically with histone methylation.