This article reviews the effects of the short-chain fatty acid butyrate on histone deacetylase (HDAC) activity. Sodium butyrate has multiple effects on cultured mammalian cells that include inhibition of proliferation, induction of differentiation and induction or repression of gene expression. The observation that butyrate treatment of cells results in histone hyperacetylation initiated a flurry of activity that led to the discovery that butyrate inhibits HDAC activity. Butyrate has been an essential agent for determining the role of histone acetylation in chromatin structure and function. Interestingly, inhibition of HDAC activity affects the expression of only 2% of mammalian genes. Promoters of butyrate-responsive genes have butyrate response elements, and the action of butyrate is often mediated through Sp1/Sp3 binding sites (e.g., p21(Waf1/Cip1)). We demonstrated that Sp1 and Sp3 recruit HDAC1 and HDAC2, with the latter being phosphorylated by protein kinase CK2. A model is proposed in which inhibition of Sp1/Sp3-associated HDAC activity leads to histone hyperacetylation and transcriptional activation of the p21(Waf1/Cip1) gene; p21(Waf1/Cip1) inhibits cyclin-dependent kinase 2 activity and thereby arrests cell cycling. Pending the cell background, the nonproliferating cells may enter differentiation or apoptotic pathways. The potential of butyrate and HDAC inhibitors in the prevention and treatment of cancer is presented.