H2B ubiquitylation (H2Bub)-dependent H3K4 methylation is mediated by the multisubunit Set1 complex (Set1C) in yeast, but precisely how Set1C subunits contribute to this histone modification remains unclear. Here, using reconstituted Set1Cs and recombinant H2Bub chromatin, we identified Set1C subunits and domains involved in the H2Bub-dependent H3K4 methylation process, showing that the Spp1 PHDL domain, in conjunction with the Set1 n-SET domain, interacts with Swd1/Swd3 and that this interaction is essential for H2Bub-dependent H3K4 methylation. Importantly, Set1C containing an Spp1-Swd1 fusion bypasses the requirement for H2Bub for H3K4 methylation, suggesting that the role of H2Bub is to induce allosteric rearrangements of the subunit-interaction network within the active site of Set1C that are necessary for methylation activity. Moreover, the interaction between the Set1 N-terminal region and Swd1 renders the Spp1-lacking Set1C competent for H2Bub-dependent H3K4 methylation. Collectively, our results suggest that H2Bub induces conformational changes in Set1C that support H3K4 methylation activity.