Mutations and translocations within the COMPASS (complex of proteins associated with Set1) family of histone lysine methyltransferases are associated with a large number of human diseases, including cancer. Here we report that SET1B/COMPASS, which is essential for cell survival, surprisingly has a cytoplasmic variant. SET1B, but not its SET domain, is critical for maintaining cell viability, indicating a novel catalytic-independent role of SET1B/COMPASS. Loss of SET1B or its unique cytoplasmic-interacting protein, BOD1, leads to up-regulation of expression of numerous genes modulating fatty acid metabolism, including