The Spt-Ada-Gcn5 acetyltransferase (SAGA) coactivator complex hyperacetylates histone tails in vivo in a manner that depends upon histone 3 lysine 4 trimethylation (H3K4me3), a histone mark enriched at promoters of actively transcribed genes. SAGA contains a separable subcomplex known as the histone acetyltransferase (HAT) module that contains the HAT, Gcn5, bound to Sgf29, Ada2, and Ada3. Sgf29 contains a tandem Tudor domain that recognizes H3K4me3-containing peptides and is required for histone hyperacetylation in vivo. However, the mechanism by which H3K4me3 recognition leads to lysine hyperacetylation is unknown, as in vitro studies show no effect of the H3K4me3 modification on histone peptide acetylation by Gcn5. To determine how H3K4me3 binding by Sgf29 leads to histone hyperacetylation by Gcn5, we used differential fluorescent labeling of histones to monitor acetylation of individual subpopulations of methylated and unmodified nucleosomes in a mixture. We find that the SAGA HAT module preferentially acetylates H3K4me3 nucleosomes in a mixture containing excess unmodified nucleosomes and that this effect requires the Tudor domain of Sgf29. The H3K4me3 mark promotes processive, multisite acetylation of histone H3 by Gcn5 that can account for the different acetylation patterns established by SAGA at promoters versus coding regions. Our results establish a model for Sgf29 function at gene promoters and define a mechanism governing crosstalk between histone modifications. 