Histone acetylation and deacetylation play essential roles in modifying chromatin structure and regulating gene expression in eukaryotes. Histone deacetylases (HDACs) catalyze the deacetylation of lysine residues in the histone N-terminal tails and are found in large multiprotein complexes with transcriptional co-repressors. Human HDACs are grouped into three classes based on their similarity to known yeast factors: class I HDACs are similar to the yeast transcriptional repressor yRPD3, class II HDACs to yHDA1 and class III HDACs to ySIR2. In this review, we focus on the biology of class II HDACs. These newly discovered enzymes have been implicated as global regulators of gene expression during cell differentiation and development. We discuss their emerging biological functions and the molecular mechanisms by which they are regulated.