Methylation of histone H3 lysine 4 (H3K4) by Set1/COMPASS occurs co-transcriptionally, and is important for gene regulation. Set1/COMPASS associates with the RNA polymerase II C-terminal domain (CTD) to establish proper levels and distribution of H3K4 methylations. However, details of CTD association remain unclear. Here we report that the Set1 N-terminal region and the COMPASS subunit Swd2, which interact with each other, are both needed for efficient CTD binding in Saccharomyces cerevisiae. Moreover, a single point mutation in Swd2 that affects its interaction with Set1 also impairs COMPASS recruitment to chromatin and H3K4 methylation. A CTD interaction domain (CID) from the protein Nrd1 can partially substitute for the Set1 N-terminal region to restore CTD interactions and histone methylation. However, even when Set1/COMPASS is recruited via the Nrd1 CID, histone H2B ubiquitylation is still required for efficient H3K4 methylation, indicating that H2Bub acts after the initial recruitment of COMPASS to chromatin.