Class I and II histone deacetylase inhibitors (HDACis) are approved for the treatment of cutaneous T-cell lymphoma and are undergoing clinical trials as single agents, and in combination, for other hematological and solid tumors. Understanding their mechanisms of action is essential for their more effective clinical use, and broadening their clinical potential.HDACi induce extensive transcriptional changes in tumor cells by activating and repressing similar numbers of genes. These transcriptional changes mediate, at least in part, HDACi-mediated growth inhibition, apoptosis, and differentiation. Here, we highlight two fundamental mechanisms by which HDACi regulate gene expression—histone and transcription factor acetylation. We also review the transcriptional responses invoked by HDACi, and compare these effects within and across tumor types.The mechanistic basis for how HDACi activate, and in particular repress gene expression, is not well understood. In addition, whether subsets of genes are reproducibly regulated by these agents both within and across tumor types has not been systematically addressed. A detailed understanding of the transcriptional changes elicited by HDACi in various tumor types, and the mechanistic basis for these effects, may provide insights into the specificity of these drugs for transformed cells and specific tumor types.Understanding the mechanisms by which HDACi regulate gene expression and an appreciation of their transcriptional targets could facilitate the ongoing clinical development of these emerging therapeutics. In particular, this knowledge could inform the design of rational drug combinations involving HDACi, and facilitate the identification of mechanism-based biomarkers of response.