Abstract Carbamazepine (CBZ) is a common antiepileptic drug (AED) that acts through multiple mechanisms including blockade and potentiation of cation channels and modulation of neurotransmitter levels. Whether it affects any component of the gene transcription machinery is unknown. Histone deacetylases (HDAC) are important in the regulation of gene expression and are currently considered a potential target for drug development. Using a high-throughput screening assay based on acetylation-dependent gene expression, we identified CBZ as a candidate and proceeded to characterize its effects on HDAC. CBZ induced acetylation of histone H4 in the HepG2 liver carcinoma cell line. CBZ inhibited HDAC 3 and HDAC 7, which are representatives of HDAC class I and II respectively. Quantitative testing in an in vitro assay demonstrated HDAC inhibition with an IC 50 of 2 μM. The major active metabolite of CBZ, CBZ-10,11-epoxide, was found to have the same HDAC inhibitory activity. The IC 50 is considerably lower than therapeutic plasma levels that are typically achieved in patients (25–51 μM). CBZ shares important clinical characteristics (teratogenicity, activity as a mood stabilizer) with valproic acid, another AED that was recently identified as an inhibitor of HDAC. These observations raise the possibility that HDAC inhibition may contribute to the pharmacological profile of CBZ.