Wnt signaling is crucial in the organization and maintenance of the human intestinal epithelium, and somatic mutations that result in deregulated Wnt signaling are an early event in the development of colorectal cancer. The Wnt ligand ultimately results in the stabilization of cytoplasmic β-catenin, which is then free to enter the nucleus and activate transcription through its interaction with the transcription factor TCF4. Our laboratory recently found that KLF4, a transcription factor highly expressed in the adult intestine and critical for intestinal differentiation, interacts with β-catenin and inhibits Wnt signaling. In this study, we characterize the molecular mechanisms of KLF4-mediated inhibition of Wnt/β-catenin signaling. We find that the KLF4 directly interacts with the C-terminal transactivation domain of β-catenin and inhibits p300/CBP recruitment by β-catenin. KLF4 inhibits p300/CBP-mediated β-catenin acetylation as well as histone acetylation on Wnt target genes. In addition, we observe that KLF4 directly interacts with TCF4 independently of β-catenin and that KLF4 and TCF4 are expressed in similar patterns within the large intestine, with greatest staining near the epithelial surface. These results provide a deeper understanding of the regulation of β-catenin in the intestine and will have important implications in cancer and stem cell research.