Pygopus has been discovered as a fundamental Wnt signaling component in Drosophila. The mouse genome encodes two Pygopus homologs, Pygo1 and Pygo2. They serve as context-dependent beta-catenin coactivators, with Pygo2 playing the more important role. All Pygo proteins share a highly conserved plant homology domain (PHD) that allows them to bind di- and trimethylated lysine 4 of histone H3 (H3K4me2/3). Despite the structural conservation of this domain, the relevance of histone binding for the role of Pygo2 as a Wnt signaling component and as a reader of chromatin modifications remains speculative. Here we generate a knock-in mouse line, homozygous for a Pygo2 mutant defective in chromatin binding. We show that even in the absence of the potentially redundant Pygo1, Pygo2 does not require the H3K4me2/3 binding activity to sustain its function during mouse development. Indeed, during tissue homeostasis, Wnt/beta-catenin-dependent transcription is largely unaffected. However, the Pygo2-chromatin interaction is relevant in testes, where, importantly, Pygo2 binds in vivo to the chromatin in a PHD-dependent manner. Its presence on regulatory regions does not affect the transcription of nearby genes; rather, it is important for the recruitment of the histone acetyltransferase Gcn5 to chromatin, consistent with a testis-specific and Wnt-unrelated role for Pygo2 as a chromatin remodeler.