Wnt signaling activates target genes by promoting association of the co-activator β-catenin with TCF/LEF transcription factors. In the absence of β-catenin, target genes are silenced by TCF-mediated recruitment of TLE/Groucho proteins, but the molecular basis for TLE/TCF-dependent repression is unclear. We describe the unusual three-dimensional structure of the N-terminal Q domain of TLE1 that mediates tetramerization and binds to TCFs. We find that differences in repression potential of TCF/LEFs correlates with their affinities for TLE-Q, rather than direct competition between β-catenin and TLE for TCFs as part of an activation–repression switch. Structure-based mutation of the TLE tetramer interface shows that dimers cannot mediate repression, even though they bind to TCFs with the same affinity as tetramers. Furthermore, the TLE Q tetramer, not the dimer, binds to chromatin, specifically to K20 methylated histone H4 tails, suggesting that the TCF/TLE tetramer complex promotes structural transitions of chromatin to mediate repression.