Although histone H3 Lys4 (H3K4) methylation is widely associated with gene activation, direct evidence for its causal role in transcription, through specific MLL family members, is scarce. Here we have purified a human MLL2 (Kmt2b) complex that is highly active in H3K4 methylation and chromatin transcription in a cell-free system. This effect requires S-adenosyl methionine and intact H3K4, thus establishing a direct and causal role for MLL2-mediated H3K4 methylation in transcription. We also show that human AKAP95, a chromatin-associated protein, physically and functionally associates with MLL complexes and directly enhances their methyltransferase activity. Ectopic AKAP95 stimulates expression of a chromosomal reporter gene in synergy with MLL1 or MLL2, whereas AKAP95 depletion impairs retinoic acid-mediated gene induction in embryonic stem cells. These results demonstrate an important role for AKAP95 in regulating histone methylation and gene expression, particularly during cell-fate transitions.