is a transcription factor that can activate or repress transcription of a variety of genes and is involved in several developmental processes. YY1 is a repressor of transcription in differentiated H9C2 cells and in neonatal cardiac myocytes but an activator of transcription in undifferentiated H9C2 cells. We now present a detailed analysis of the functional domains of YY1 when it is acting as a repressor or an activator and identify the mechanism whereby its function is regulated in the differentiation of H9C2 cells. We show that histone deacetylase 5 (HDAC5) is localized to the cytoplasm in undifferentiated H9C2 cells and that this localization is dependent on Ca 2ϩ /calmodulin-dependent kinase IV (CaMKIV) and/or protein kinase D (PKD). In differentiated cells, HDAC5 is nuclear and interacts with YY1. Finally, we show that HDAC5 localization in differentiated cells is dependent on phosphatase 2A (PP2A). Our results suggest that a signaling mechanism that involves CaMKIV/PKD and PP2A controls YY1 function through regulation of HDAC5 and is important in the maintenance of muscle differentiation. differentiation YY1 IS A UBIQUITOUSLY expressed, highly conserved transcription factor that has been implicated in a variety of cellular processes, including development, where it can function as a polycomb protein (1). Through its interactions with other proteins, YY1 can repress, activate, or initiate transcription from various promoters (for a review, see Ref. 33). Previous work has suggested that YY1 functions primarily as a repressor and that its activator function is dependent on a conformational change that alters its repression domain (4, 13, 14). YY1 has also been shown to displace transcriptional activators from promoters, resulting in transcriptional repression (15,33). Posttranslational modifications of YY1, including acetylation and deacetylation, also play roles in its various functions (38). Acetylation of histones results in derepression of transcription due to an opening of the chromatin structure, whereas deacetylation results in transcription repression. YY1 has been shown to interact with class I histone deacetylases (HDACs) 1, 2, and 3 in HeLa cells (38), and this may be a mechanism of gene regulation shared by YY1 and histones. There are three classes of HDACs (I, II, and III) based on their homology with three structurally and biochemically distinct yeast HDACs (reviewed in Refs. 24 and 25). Muscle cells express all three HDAC classes (40). Localization of class II HDACs is regulated by phosphorylation; they translocate to the cytoplasm when phosphorylated, which results in transcription derepression (22).In muscle cells, YY1 has been shown to repress most muscle-specific genes tested with the exception of the BNP promoter (2, 6, 29). We have recently shown that YY1 represses gene expression and promoter activity of the human and rat ␣-myosin heavy chain (␣-MyHC) gene in cardiac myocytes (21, 32). Interestingly, we showed that repression is dependent on a region of the protein known to interact with...