The overlapping expression profile of MEF2 and the class-II histone deacetylase, HDAC7, led us to investigate the functional interaction and relationship between these regulatory proteins. HDAC7 expression inhibits the activity of MEF2 (-A, -C, and -D), and in contrast MyoD and Myogenin activities are not affected. Glutathione S-transferase pulldown and immunoprecipitation demonstrate that the repression mechanism involves direct interactions between MEF2 proteins and HDAC7 and is associated with the ability of MEF2 to interact with the N-terminal 121 amino acids of HDAC7 that encode repression domain 1. The MADS domain of MEF2 mediates the direct interaction of MEF2 with HDAC7. MEF2 inhibition by HDAC7 is dependent on the N-terminal repression domain and surprisingly does not involve the C-terminal deacetylase domain. HDAC7 interacts with CtBP and other class-I and -II HDACs suggesting that silencing of MEF2 activity involves corepressor recruitment. Furthermore, we show that induction of muscle differentiation by serum withdrawal leads to the translocation of HDAC7 from the nucleus into the cytoplasm. This work demonstrates that HDAC7 regulates the function of MEF2 proteins and suggests that this class-II HDAC regulates this important transcriptional (and pathophysiological) target in heart and muscle tissue. The nucleocytoplasmic trafficking of HDAC7 and other class-II HDACs during myogenesis provides an ideal mechanism for the regulation of HDAC targets during mammalian development and differentiation.