Chromatin remodeling by acetylation/deacetylation of histones plays an important role in the regulation of gene expression. Acetylation of histones is regulated by two classes of enzymes: histone acetyltransferases (HATs) and histone deacetylases (HDACs). Several HDAC inhibitors, belonging to different structural classes, cause reversible inhibition of HDAC enzymes. They cause hyperacetylation of histones and have shown efficacy in experimental systems as anti-tumor agents. Phase I /II clinical trials with some of these agents have demonstrated that they are relatively well-tolerated and have anti-tumor activity in heavily pretreated patients with advanced solid and hematological tumors. The effects of HDAC inhibition are believed to be caused, in part, by accumulation of acetylated histones, although the exact mechanism of gene repression or activation is not well understood. Recent data from our and several other laboratories demonstrate that HDAC inhibitors have potent immuno-modulatory activities that have previously been largely unrecognized. Importantly, inhibition of HDAC enzymes by a far less concentration than required for anti-tumor effects is sufficient for induction of immuno-modulation by these compounds. This review addresses the issue of HDAC inhibitors and their effects on immuno-modulation on both in vitro and in vivo models of inflammation, autoimmunity and transplantation. The likely molecular and biochemical underpinnings of these novel effects will be reviewed and the potential clinical benefits will also be briefly discussed.