Many Wnts influence cell behavior by a conserved signaling cascade that promotes the stabilization and nuclear accumulation of beta-catenin (beta-cat), which then associates with TCF family members to activate target genes. The histone acetyltransferase CREB binding protein (CBP) can bind to TCF and inhibit Wnt signaling in Drosophila. In contrast, studies in vertebrates indicate a positive role for CBP and the closely related protein p300 as beta-cat binding transcriptional co-activators. We address this discrepancy by demonstrating that in addition to its negative role, CBP has an essential positive role in Wnt signaling in flies. CBP binds directly to the C-terminus of Armadillo (Arm, the fly beta-cat) and is recruited to a Wnt-regulated enhancer (WRE) in a Wnt- and Arm-dependent manner. In a human colorectal cancer cell line, we show that CBP and p300 can inhibit Wnt signaling and demonstrate that human p300 can bind directly to TCF4 in vitro. Our results argue that CBP/p300 has an evolutionarily conserved role as a buffer regulating TCF-beta-cat/Arm binding. Subsequent to this interaction, it also has an essential role in mediating the transactivation activity of beta-cat/Arm.