In keratinocytes, the cyclin/CDK inhibitor p21^WAF1/Cip1 is a direct transcriptional target of Notch1 activation; loss of either the p21 or Notch1 genes expands stem cell populations and facilitates tumor development. The Notch1 tumor-suppressor function was associated with down-regulation of Wnt signaling. Here, we show that suppression of Wnt signaling by Notch1 activation is mediated, at least in part, by down-modulation of Wnts gene expression. p21 is a negative regulator of Wnts transcription downstream of Notch1 activation, independently of effects on the cell cycle. More specifically, expression of the Wnt4 gene is under negative control of endogenous p21 both in vitro and in vivo. p21 associates with the E2F-1 transcription factor at the Wnt4 promoter and causes curtailed recruitment of c-Myc and p300, and histone hypoacetylation at this promoter. Thus, p21 acts as a selective negative regulator of transcription and links the Notch and Wnt signaling pathways in keratinocyte growth control.