Mono-ubiquitylation of histone H2B correlates with transcriptional activation and is required for di- and trimethylation at Lys 4 on the histone H3 tail (H3K4) by the SET1/COMPASS methyltransferase complex through a poorly characterized trans-tail pathway. Here we show that mono-ubiquitylation of histone H2B promotes ubiquitylation at Lys 68 and Lys 69 of Swd2, the essential component of SET1/COMPASS in Saccharomyces cerevisiae. We found that Rad6/Bre1 ubiquitylation enzymes responsible for H2B ubiquitylation also participate directly in Swd2 modification. Preventing Swd2 or H2B ubiquitylation did not affect Set1 stability, interaction of Swd2 with Set1 or the ability of Swd2 to interact with chromatin. However, we found that mutation of Lys 68 and Lys 69 of Swd2 markedly reduced trimethylation, and to a lesser extent dimethylation, of H3K4 at the 5'-end of transcribing genes without affecting monomethylation. This effect results from the ability of Swd2 ubiquitylation to control recruitment of Spp1, a COMPASS subunit necessary for trimethylation. Our results further indicate that Swd2 is a major H3-binding component of COMPASS. Swd2 thus represents a key factor that mediates crosstalk between H2B ubiquitylation and H3K4 trimethylation on chromatin.