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Posttranslational modifications of histone tails regulate chromatin structure and transcription. Here we present global analyses of histone acetylation and histone H3 Lys 4 methylation patterns in yeast. We observe a significant correlation between acetylation of histones H3 and H4 in promoter regions and transcriptional activity. In contrast, we find that dimethylation of histone H3 Lys 4 in coding regions correlates with transcriptional activity. The histone methyltransferase Set1 is required to maintain expression of these active, promoter-acetylated, and coding region-methylated genes. Global comparisons reveal that genomic regions deacetylated by the yeast enzymes Rpd3 and Hda1 overlap extensively with Lys 4 hypo- but not hypermethylated regions. In the context of recent studies showing that Lys 4 methylation precludes histone deacetylase recruitment, we conclude that Set1 facilitates transcription, in part, by protecting active coding regions from deacetylation.