Pygopus and Legless/Bcl-9 are recently discovered core components of the Wnt signaling pathway that are required for the transcriptional activity of Armadillo/beta-catenin and T cell factors. It has been proposed that they are part of a tri-partite adaptor chain (Armadillo>Legless>Pygopus) that recruits transcriptional co-activator complexes to DNA-bound T cell factor. Here, we identify four conserved residues at the putative PHD domain surface of Drosophila and mouse Pygopus that are required for their binding to Legless in vitro and in vivo. The same residues are also critical for the transactivation potential of DNA-tethered Pygopus in transfected mammalian cells and for rescue activity of pygopus mutant embryos. These residues at the Legless>Pygopus interface thus define a specific molecular target for blocking Wnt signaling during development and cancer.